Advanced marketing strategy - Essay Example

1. What do you think is the purpose of marketing Think about the marketing efforts of some big household s, how would you define their marketing efforts, how do they try to attract and keep customers The key objective of an organization's marketing efforts is to develop satisfying relationships with customers that benefit both the customer and the organization. These efforts lead marketing to serve an important role within most organizations and within society. The main purpose of marketing is just to earn profit for the product or the service they are providing. So every company use different strategies for earning profits and marketing their product or service. There are very famous households names like pampers, coke, surf etc which are very popular globally. These products use different marketing efforts for different countries, by keeping in mind their culture, language and ethics. They use different techniques to build up the loyalty and keep on attracting new customers. Famous household products are known for the quality and the trust which they have built up in years. So, they use different strategies in different countries to keep their product in demand; usually people get addicted to these like coke or else use to it, like pampers. They usually sponsor big events or work for a cause, which results in people getting used to the brands. Big household's names are famous worldwide and people know it wherever they go theywill find it there. 2. Marketing strategists these days focus on offering not products and services but solutions and / or experiences. Describe, analyse the two terms and provide examples. Experiences: a firm can create stage and market experiences by combining or orchestrating several goods and services for example an amusement park or a water park directly represents the experiential marketing. Customers after paying ticket, enjoy the rides in the park, enjoy immediate thrill which is provided by these experiences. A theme which is used by restaurants, they can also be a good example of direct experiences. Solutions can also be marketed extensively. Create integrated and customized offers are given to solve end-to-end problems which customer faced e.g. Dupont Building innovations for construction, and UPS logistics services supply Chain solutions. The perfect solution is to identify people's problems first and then fit your product right into the place, so that's how it is simply done and will also work like wonders. This results in products which are marketed for their usage. They are pictured and considered as the trouble shooters for the customers, they create an image of only solution to the problems. 3. Would you agree that Porter's framework of generic strategies is useful for (a) academics, (b) practitioners Illustrate your answer with examples. In 1980, despite its instant recognition as one of the most important theoretical frameworks of the business science, the generic strategies developed by Porter were criticized by many academics and professionals. There is evidence by General Motors which became the market leader within 10 years through implementation of particularly the differentiation strategy chalked out in the framework. GM also have to work efficiently to cover up all the different price ranges which are already present in the market, which will prevent any new entrants from venturing into the market and also to compete with the small player that existed within these price divisions. However,one of the main criticisms is the obsolescence of the model in the current competitive market conditions, when new sources of competitive advantage are available to companies. The new competitive conditions of the 21st century demands a re-formulation of this model in order to integrate the new business paradigms identified and applied by academics and professionals. A re-interpretation of generic strategies from the perspective of market relationships is necessary. The three generic strategies,cost advantage,differentation and focus are said to be mutually exclusive by Porter while companies have shown hybrid strategies today. There are empirical and theoretical backgrounds regarding, a) Generic strategies as mutually exclusive, b) The specificity of differentiation strategy, and c) Generic strategy choices and performance. 4. What do you think it means to be (a) marketing oriented, (b) socially marketing oriented, (c) relationship marketing oriented business school Marketing oriented school suggests not to find the right customers for your products but to find the right product for your customers. The marketing concept thus holds that organizational goals are more effectively achieved by the firm than its competitors by creating ,delivering and communicating superior customer value to the chosen target markets. Socially marketing oriented implies considering the benefits and harms to the society that may be caused by marketing efforts in order to promote their product/service i.e. marketing should not be done at the expense of the society and instead should add value to the society. Social marketing supports behaviour change campaigns e.g. McDonald's promotion of a state-wide immunization campaign in Oklahoma. Relationship marketing aims to build mutually satisfying long term relationships with key constituents that are customers, employees, marketing partners, suppliers, distributors etc) and members of the financial community (shareholders, investors etc.) in order to earn and retain their business. 5. What are the major differences between the levels of strategising: corporate, business (SBU), and functional Corporate level strategy is the organization's sense of purpose. A business level strategy is the management of a specific division or a business unit contributing to achieve corporate objectives. Functional level strategy is to formulate marketing programmes through efficient marketing management. Marketing mix variables can be blended to form a market offering and the product can be managed. Corporate level strategy deals with the selection of the business in which the company must compete and development and coordination of the portfolio of the business selected. It is concerned with reach, competitive contact, managing activities and business interrelationships and management practices. Following are the important component of corporate level strategy. (a) Growth or directional strategy (what should be our growth objective), (b) Portfolio strategy (what should be our portfolio of lines of business), and (c) Parenting strategy (how we allocate resources and manage capabilities and activities across the portfolio). SBU's deal with positioning the business against rivals, anticipating changes in technology and consumer demand and adjusting strategies accordingly, employing vertical integration and political actions such as lobbying to develop and sustain competitive edge. Functional level strategies are related to business processes and the value chain. It involves the development and coordination of resources for efficient and effective business unit level strategies. Three basic characteristics distinguish functional strategies from corporate level and business level strategies: shorter time horizon, greater specificity, and primary involvement of operating managers. 6. Would you agree that growth strategy is better suited for MNCs and big firms; and a stability strategy is more appropriate for SMEs Market growth Higher market penetration Sell more to same market (i.e., get current customers to buy more or buy more frequently) If overall market is growing this may not necessarily mean a growth in overall market share If overall market is not growing this means a growth in overall market share Find new markets Sell to markets or market segments not previously targeted Develop new products for existing customers Develop new products for new customers Market stability Techniques to keep the status quo Primarily used in times of economic decline or market decline Generally requires the taking of market share from others in the industry Organizations can implement growth strategies by participating in mergers and acquisitions, takeovers, internal development, strategic partnering, joint ventures, long-term contracts and strategic alliances. This resulted in the merger with Billiton plc, creating the largest diversified mining company in the world. Organizations may wish to undertake a strategy of stability if they have just completed a frenzied period of growth or their industry is in a period of rapid upheaval and the future is highly uncertain. Porter's generic competitive strategies approach proposes three strategies for outperforming other corporations in the same industry: differentiation, cost-leadership and focus A growth strategy is suitable for large medium and small enterprises depending on the product type. There is no hard and fast rule that only big firms can sustain their product in the growth stage of the product life cycle. Thought undoubtly MNCs and big firms have excess resources to spend on R & D and on technological and product style innovation. http://www.megaessays.com/viewpaper/20158.html 7. Porter's Five Forces Framework introduces an important factor for achieving / attaining competitive advantage: barriers to entry. Identify and discuss types of barriers. Provide examples from an industry / company of your choice. Are these industry-, sector- specific or generic in nature Why or why not Barriers created by governments Government can restrict entry by regulation and monopoly measures. examples may include industries such as utilities as it is more feasible to have one electric company provide power to local communities than many. This is industry-specific as government cannot monitor and regulate any and all types of industries where variety of products are in demand e.g. cosmetics industry. Patents and proprietary knowledge Ideas and knowledge when patented provide competitive edge and are treated as private property. Edwin land introduced the Polaroid camera and held a monopoly in the instant photography industry. When Kodak attempted to enter the market with a comparable camera, Polaroid sued for patent infringement and won. Asset specifity Potential entrants are reluctant to make investments in highly specialized assets. For example Kodak had much capital invested in its photographic equipment business which enabled it to aggressively resist efforts by Fuji to intrude in its market. These assets are both industries specific and large which cannot be sold or converted to other uses if venture fails. Organizational or internal economies of scale This refers to cost leadership for a given level of quality which brings in ability to cut price in retaliation which deters potential entrants. This is generic in nature as it is not industry dependent. The greater the difference between an industry's Minimum efficient scale (MES) and entry unit costs, the greater the barrier to entry. For example in long distance communications, roughly 10% of the market is necessary for MES. If sales for a long distance operator fail to reach 10% of the market, the company is not competitive. Difficulty in brand switching i.e. customer loyalty can discourage potential entrants. This refers to the generic strategy of differentiation. Restricted distribution channels and high scale threshold can thus lead to restrict potential entrants. 8. How do the marketing and sales functions in organisations help create value Provide examples. Value creation skills for marketers include identifying new customer benefits from customer's point of view, utilizing core competencies from its business domain and selecting and retaining/managing business partners or stakeholders from its collaborative networking. To create new customer benefits marketers and sellers must understand what the customer thinks about, what he wants, what he does and worries about. They observe whom customers admire and interact with and who has an influence on their minds. Value chain is a tool for identifying ways to create more customer value, through which customer stays longer, buys more as the company introduces more products, talks favourably about the company and its products and pays less attention to competing brands. The best of class practices of the world's best companies can be studied in addition to estimating the competitor's Cost and performances is used as a benchmark and later comparing them with the company's own costs and performances. Xerox, AT & T, Polaroid, Motorola, Siemens and Tata steel have recognized their employees into cross-functional teams. Cisco inc has reduced its suppliers from 20 to 3 which resulted in cutting costs, and improving supplier quality. 9. How would you define 'resources' What is the link between 'resources' and 'capabilities' Provide examples from an industry and a company of your choice. Demonstrate the way(s) in which resources and capabilities contribute to company performance. Resources are the firm specific assets useful for creating a cost or differentiation advantage that few competitors can easily acquire. Examples of resources in a software industry particularly adobe may include: Patents and trademarks Installed customer base Firm's reputation or band power Brand equity Proprietary know-how Capabilities, on the other hand, are the firm's ability to utilize its resources effectively. The firm's resources and capabilities together form distinctive competencies which enable innovation, quality, consumer responsiveness/demand and efficiency out of which cost advantage or differentiation advantage can be created. Through lower cost or superior and ultimately desired benefits to the target customer's superior value can be created. The company's overall performance gets a boost with effective and efficient combination and contribution of resources and capabilities. Thus in order to develop a competitive advantage a firm must have superior resources and capabilities than its competitors. Without these, any advantage to the firm over its competitors would soon disappear. 10. Identify aspects / traits of company resources and capabilities which affect the degree to which competitors can imitate them (i.e. degree of (in) imitability of resources and competencies). The question of imitability evaluates to what extent valuable resources and capabilities can be sources of competitive advantage. If competitor firms that do not possess these resources face a cost disadvantage in obtaining/ developing the resources, then the resources are imperfectly imitable. Two ways firms may imitate resources is through direct duplication or substitution. There are four sources of costly imitation: 1) unique historical conditions, 2) causal ambiguity, 3) social complexity, 4) patents. Resources including tangible and intangible assets and capabilities which refer to assets that help take advantage of these resources are sources of a company's competitive advantage. Technology, exterior or outlook of the product, quality of material used, some features, the policies and strategies may be easily imitable for many challenging competitors. 11. What do you think are the main applications of consumer behaviour (of knowing customers), to marketing strategy and public policy Consumer buying decision may be defined as, 'Buying behavior of individuals and households that buy products for personal consumption'. Buying Decision behaviour is largely influenced by buyer's characteristics hence the consumer behaviour. These may include Cultural, Hispanics who are brand loyal. African Americans are brand and price conscious. Asian Americans are fastest growing and most affluent subculture. Mature Consumer Social, Memberships References ( Aspirational Groups) Opinion Leaders (Buzz Marketing) Family Role and Status Psychological and Age and group cycle Occupation Economic situation Lifestyle (activities, interests) Personality and self concept (brand Personlity) Personal characteristics Motivation (Needs provide motives for consumer behavior, Motivation research and Maslow's hierarchy of needs). Perception (Selective attention, selective distortion, selective retention). Learning (Drives, stimuli, cues, responses and reinforcement). Beliefs and attitudes. The buyer's decision involves his product choice, Brand choice, dealer choice, purchase timing and purchase amount that he chooses. Marketing strategies can only be chalked out on this context. Only after knowing the behaviour and responses of the target consumers, a company can formulate realistic strategies and public policies. 12. Culture is a major determinant of consumer behaviour and is, therefore, of major interest to marketing strategists. Think of examples of cultural factors which are manipulated by marketers in order to persuade, affect consumer behaviour. Cultural factors incorporate the basic culture of a region or nation, its sub-culture and social class are known as lower, middle or upper class. Examples can be of many items of which we use daily, for example if we see media industry, the Television, upper class consumers have a propensity to prefer news and drama, and lower class prefers operas and daily soaps. Providing each segment the desirable ad right kind of a product can persuade consumer behaviour. In fashion industry, garments companies have blended modern n ethnic cultures as per the consumer changing demands. Cultural factors are the fundamental determinant of a person's needs and wants and hence can be identified and manipulated by marketers to reap excessive benefits. Customer's beliefs, attitudes perception and motivation shaped by cultural and personal factors can be studied and utilised. 13. Recently, the concept of segmentation has been criticized by marketing practitioners. Do you think that market segmentation is still vital to company success Yes, market segmentation is vital a company's success. it is important to better satisfy the customer needs as it provides specific marketing mix to the chosen target market. Segmentation can be cost-effective and can result in substantial increases in sales and consumer responsiveness. Segment marketing offers key benefits over mass marketing. Market segmentation on the basis of demographic, psychographic, behavioral, purchasing approaches, situational, and on the basis of personal characteristics have resulted in tremendous profits and new customers, hence larger revenue base for the company. Patterns important to segment markets include homogenous, diffused and clustered preferences of the widespread customer base of a company over a nation or region or over the world. 14. How would you define and distinguish the following terms: product differentiation, market segmentation Provide examples of each. The division of market into different homogenous groups of customers is known as market segmentation. Marketing segmentation makes it possible for the firm to tailor the marketing mix according to the specific needs of the target customers. Though all segments of the marketing mix may not be changed from one segment to another, the only difference may be in only the promotion campaigns. A market can be segmented on various bases and there is further difference in consumer and industrial markets segmentation. BMW studies changing consumer lifestyles to match product development to segmentation. The campaign by Dove is an example of demographic segmentation. Products can be differentiated in form, size, shape or physical structure of the product. Product differentiation refers to addition of an exclusive feature, style or fragrance or any such thing as durability, customization, reliability and reparability to the product which differentiates it from the company's own other products and specifically from competitor's products. In monopolistic competition product differentiation is widely employed e.g. in soap industry, cellular devices etc. The products are not homogenous anymore. Price, quality or any other factor may vary. Proctor & Gamble makes Pantene, Head & shoulders and Rejoice shampoos each with separate brand identity. 15. Do you think that geo-demographics can be used by telecommunications companies Think about companies offering fixed telephone services, mobile telephone services, broadband and Internet providers. The world is evolving on daily basis, if we talk in terms of technology. Geo demographic is the deployment of a sales team on a regional and district basis as opposed to a product types or a customer type basis. It is also known as the methods which analyze the combination of geographic and demographic variables; for example ACORN. ACORN (A Classification Of Residential Neighborhoods) is a database which divided the entire population of London, according to the type of houses they live in. Marketers usually mix different variables for defining the demographic profile. Once these profiles are constructed, they can be used to develop a marketing strategy and marketing plan. The four types of demographics in marketing are age, gender, race, and income level. So, the world of telecommunication, broadband and internet providers can change wholly, as the number of technologies and research discipline that enables the internet to reach out into the real world of physical objectives. Technologies like RFID, short-range wireless communications, real-time localization and sensor networks are now becoming increasingly common, bringing the Internet of Things into commercial use. 16. West et al. discuss four types of competitive tactics: leaders, challengers, leaders, followers. Choose an industry and provide examples of each. Describe the traits of the four tactics, using companies of your choice. Market leaders are firms that have the largest share in the relevant product market. Market Leaders well-known to us are Microsoft, Intel, LG, Gillette and Visa cards. Their competitive strategies may include; a) Expanding the market share through new customers or through new usage and b)Defending market share which include: Position defense Flank defense Pre-emptive defense Counteroffensive defense Mobile defense Market Challengers: The second, third and lower ranks in an industry are often called runner-up firms. They may chose to attack the leader or other competitors to gain market share or they may choose to follow them as market followers. Toyota today produces more cars than General Motors. Frontal attack in which attacker matches its opponent's product price, distribution, and advertising e.g. Amul dairy Products in India. Flank attack is to serve uncovered market needs e.g. Woodland has challenged Bata and Liberty shoes by introducing robust, comfortable and durable outdoor shoes. Encirclement attack is an attempt to capture a wide slice of the market share through a blitz e.g. Sun Microsoft. By Pass Attack which includes bypassing the enemy altogether. Guerrilla warfare consists of small attacks to demoralize the opponent. Market Followers: e.g. S & S Cycle has built its name by improving on Harley Davidson handiwork. They may choose to be: Imitators Adaptors Counterfeiter cloners Market Nichers is being a leader in a small market e.g. Zippo metal cigarette lighter. 17. Competitor analysis is key to developing sound marketing strategies and overall, business-level strategies. Advise a company of your choice of a systematic way to undertake effective, complete and up-to-date competitor analysis. Once a company say PepsiCo identifies its competitors, it must ascertain their strategies, objectives, strengths and weaknesses e.g. it identifies that Coca Cola Dasani is its major bottled-water competitor for its Aquafina brand. Strategies: PepsiCo needs to ascertain the strategic group now which is a group pf firms following the same strategy in a given market. These may be based on quality of product or level of vertical integration. Objectives: Many factors shape the competitors objectives, including size, history, current management and financial resources. in this case ,if the competitor is a division of a larger company, it is important to know if Coca Cola i.e. the parent company is running it for growth, profits or milking it. Strengths and weaknesses need to be analyzed. These include: Share of market Share of mind and Share of heart Selecting competitors: The Company can focus its attack on one of the following classes of competitors: Strong vs. weak Close versus distant Good vs. bad Selecting customers: The firm evaluates its customer base and think about which customers it is willing to lose and which to retain. They may be vulnerable or not and valuable or not. Australian Telephone Company. Telstra conducted this type of analysis and developed a series of Flex-plan products. 18. What is the role of external analysis in the three components of the strategic planning process: analysis, choice / formulation, and implementation In SWOT analysis, strengths, weaknesses, opportunities and threats to the company are identified. It is a way of monitoring external and internal marketing environment. Microeconomic forces and macroeconomic factors that might influence a business' ability to earn profits must be closely monitored. To evaluate opportunities MOA i.e. marketing opportunity analysis can be used by companies to determine attractiveness and success probability. An environmental threat is a challenge posed by an unfavourable trend or development that needs to be checked. In the formulation components, goals and strategies are formulated or chosen. Objectives must be arranged hierarchically, should be quantitative, realistic and consistent. Strategies consist of marketing strategy, compatible strategy and sourcing strategy. Porter's generic strategies of cost, differentiation and focus step regarding the external analysis. In the implementation stage, if the company has decided to attain technological leadership it must plan programs to strengthen it R & D department and gather technological intelligence, conduct trainings etc. 19. A chocolate manufacturer is launching an ice-cream based on its leading brand. It had decided to 'just do it' and see what happens. How can the company measure the extent to which this strategy has worked or not The chocolate company can conduct a marketing research after launching its ice-cream product in the market. The extent of research may be largely dependent on how large a campaign the company has carried out. Problem definition would be whether the market accepts the new product. Research design may be classified into exploratory, descriptive or causal research. Data type can be primary or secondary. Questionnaires are designed and attitude measurement is incorporated through self-reporting, indirect techniques, behaviour observation etc. a sampling plan is designed, i.e. sample size and population chosen. Data is collected and analyzed. Hypothesis testing and significance testing is followed by concluding thoughts and recommendations. 20. Think of examples of recent / current cultural shifts. How do you think marketing strategists benefit from these "Culture is constantly shifting, realities are constantly shifting. And for different groups, different realities exist. And the challenge is to be present, is to be in the moment of understanding that shift." (Moreno Vega). While broad cultures tend to shift values and beliefs slowly, changes within sub-cultures can occur relatively quickly. For instance, the music industry often experiences rapid shifts as a sub-culture of music enthusiasts discovers new artists. The key for marketers targeting sub-cultures is to maintain close contact with these groups through regular marketing research. In this way marketers can see how different sub-cultures behave and also spot trends, which the marketer can capitalize on through new marketing tactics (e.g., new products, new sales channels, added value, etc.). Following are some examples which show that marketing strategist's can benefit them from the current cultural shifts. Inhibiting belief Reframed belief Big is safe High performance is our only security Low cost means low quality Examples of where this is not so, such as Toyota Low performance is tolerated There are adverse consequences for low performance and higher performance gets higher rewards Risk and control are boring Risk management is about business survival and high performance I need to be involved in everything I trust those with the accountability 21. You are a marketing manager in a big, multinational electronics company. You need to assess the profit potential and viability of various target segments. How will you go about doing this What criteria can you use to assess the segments' viability As a manager of a multinational company, I will divide the target segments in two categories, developed countries and developing countries. The new technology and products will be introduced in the developed country; will help in assessing the profit potential in the developing countries. Customised products will be launch by keeping in mind the customer's need. For example Sony, launches new products every season, television with more pixels, sound system with improved quality and cameras of increased mega pixels. After they get popular in Developed countries, developing segment automatically want to use the product. It will increase the viability by heaps and bounds. I have to keep in mind the brand image and other competitors, for that I will use special marketing plan to keep our product at a certain level. I will later collect sales sample and provide the company with a report. Made in Japan is still a dream for developing countries which is easily available in the developed countries. 22. Think of strategic groups in the car industry, fast food industry, and pharmaceutical industry What are the ingredients of strategic differences between members of different groups What are the implications of a company belonging to one or another group There may be a number of strategic groups within an industry, whether its car, fast food or pharmaceutical. Each strategic group may have a number of firms in it. An industry has a large number of strategic groups, if the industry is very mature and the product/service is perceived by consumers to be commodity like. The more mature the industry, the more crowded the strategic map will be with strategic groups. It is very likely that one will see varying degrees of the above three generic strategies. For instance, one could see a strategy like low cost with differentiation (differentiation with low cost). On the other hand, the less mature (emerging) the industry, the fewer the number of strategic groups since consumer needs are still evolving and the products/services are not yet perceived by consumers as commodities. For instance, Bogner, Mahoney andThomas (1998), and McGee and Thomas (1986), think that strategic groups are firms in an industry with similar cost structures, resource profiles, productdiversificationand formal organization. However, this author disagrees with this. For instance,BMW,Mercedes Benz(a division of Daimler-Chrysler), Lexus (a division of Toyota), Infiniti (a division of Nissan), compete with Cadillac (a division of General Motors). It is quite clear that these competitors do not have similar resource profiles, cost structures, product diversification or formal organization. In fact the companies may be very different on all of the above factors. Firms with multiple SBUs and multiple products (brands) compete against each other in different market segments through their brands or strategic business units. References: Beane T.P. and Ennis D.M. (1986): Market Segmentation: A Review, European Journal ofMarketing, 21:5, pp. 20-42. Bogner, W., J. Mahoney and H. Thomas. (1998). Paradigm Shift: The Parallel Origin, Evolution, and Function of Strategic Group Analysis with theResource-Based Viewof the Firm," Advances in Strategic Management. Chapter 15, pp 63-100. Burnham, F, Linda.(2009). Listening for the Lexicon of Cultural Shift. Reading room on the website community arts network. Accessed on 18th March 2009. Clin. Guru. (2007). Porter's generic strategies: a re-interpretation from a relationship marketing perspective. Vol. 7, No. 4. Publisher: Westburn Publishers Ltd Hisrich. D. Robert. (2000). Marketing. Edition: 2, illustrated. Published by Barron's Educational Series, 2000 Kerin. A. Roger, Hartley, W. Steven & William Rudelius. 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