Developing a marketing strategy.
Task 1--investigate the planning principles and range of tools and techniques involved in developing a marketing strategy.
The objectives of an organisation:
Harrods in London is no one store which provides questionlessly Bristish products and life style service may have many objectives and it is not necessary that these objectives should be similar to another business nor there are any specific numbers are required. It depends and varies to business to business. But the objectives of the Harrods store is as follows;
It wants to grow its business and keeps on contemplating to invest more money in its various businesses. By growth they mean in terms of growth in sales, either the actual number of a product sold or the overall value of the products sold in money terms.
2- Providing services
It wants to provide services of very high standard and Products it provides are questionlessly of Britsh style.
Harrods believes in ethical values and therefore pays keen attention on their employee in providing best customer services.
It tries to make more and more profit by two means
- by increasing their sales
- by increasing their profit margin in each of their product.
However my Harrods believes a marginal profit on the products than their competitors and believe in saving more and more money on the part of their customers.
1-Understanding consumer needs:
Markets change rapidly and it is therefore essential that organizations constantly look for new product and market opportunities. Plenty of organisation have failed to appreciate the importance of this principle and have found themselves operating in declining markets.
2-Keeping ahead of competition :
Increased competition can have a dramatic impact on an organisation . For example a competitor might start offering delivery within three days, whereas previously the best performance in the market might have been seven days. Customer might immediately switch to the faster service.
3-Communicating effectively with consumer
Even the best product , effectively distributed at the right price to the target market, may experience poor sales if the promotional sale is ineffective.
In many markets where competition is intense, high levels of promotional support are necessary is to succeed.
4-Using new technology
This is an area that has been gaining importance in recent years. The ability to book flights over the internet with companies such as EasyJet is changing how the airlines industry works.
The use of technology is now considered by many marketing managers as key marketing principle.
Once the marketing objectives have been agreed and formulated it is necessary to develop marketing plans to achieve the goals.
The marketing mix provides an excellent framework for developing marketing plans.
The marketing mix is made of following parts;
Product means the combination of goods and services that is offered to target the customer. Like Vauxhall offers different cars with different specification and excessories to target the customer.
Price is the amount of money a customer has to pay to acquire the product. This can vary considered ably from the advertised price.
Place describes where and how the consumer can obtain the product. A business may have more than one branch in more than one place and now a days customer can products over the internet.
Promotion describes activities undertaken to ensure the consumer know about the product and its capabilities. It is usally made of advertising combilnation, sales promotion and personal selling.
Packaging in the marketing mix is concerned with protection, promotion and containment. Effective packaging needs to be distinctive and recogniseble , reinforcing the brand image. This has become very important in recent years because of the enormous range of the products available in market. In some case a product provides the distinguishing feature of the product.
Blending the elements of the marketing mix:
The secret of the success lies in blending the elements of the marketing mix effectively, as each individual poduct requires a different blend.
Soft drink procedure need to ensure their product tastes pleasant but the most important marketing mix elements are probably place and promotion. people are thirsty and want to find the drink at convenient place as as local stores and bus stations etc.
So we can say that above mentioned marketing principles and marketing mix provide a best medium in developing marketing strategy.
Task no 2
A strategy is a plan that integrates an organization's major goals, policies, decisions and sequences of action into a cohesive whole. It can apply at all levels in an organization and pertain to any of the functional areas of management. Thus there may be production, financial, marketing, personnel and corporate strategies, just to name a few. If we look specifically at marketing then there may be pricing, product, promotion, distribution, marketing research, sales, advertising, merchandising, etc. strategies. Strategy is concerned with effectiveness rather than efficiency and is the process of analysing the environment and designing the fit between the organization, its resources and objectives and the environment.
The strategic process refers to the manner in which strategy is formulated. There are several approaches. First, the rational approach, making use of tools such as SWOT analysis and portfolio models. Second, the flexible approach, which employs multiple scenario planning. The creative approach reflects the use of imagination in planning. The behavioural approach reflects the influence of power, politics and personalities. And finally, the incremental approach is based on small adjustments or changes to previously successful strategies.
Opportunities and threats:
Ansoff,s market mix is a useful way to think about different growth strategies. The vertical axis represents opportunities for growth in markets that are currently being served. The horizontal axis considers whether the firm would be better off putting its
resources into existing products or acquiring new products. The matrix provides four different fundamental marketing strategies,
Product development and
Market penetration involves selling more of an existing product into existing market.
Possible options are persuading current customers to use more or attracting new customers altogether.
We can see that in the case of Ford they were unble to to do market penetration.
They could not keep their existing customers by ot attract their new customers as they got failed to to upgrade their products better than their competetors.
Suggestion: The best suggestion is they in order to penetrate in the market they need to make products more attractable by bringing in more up to date technology and a very competing price , they will need to bring in new products such as cars with new features , making car part available everywhere, online support and stores etc and can attract new customers while keeping existing customers as well.
This means expanding new markets with existing products. These may be new markets geographically , new market sectors or perhaps new uses for the product.
Ford had made good progress making available their products in many parts of the world, but they have failed to make their parts available in those areas. There are some parts of the vehicles which are not available and thus customers tend to avoid buying their products for future complications.
Ford needs to ensure that all the parts of their products are available for the customer without any hassel.
Putting new products into the market is a risky strategy because organisation is moving into areas in which it has little or no experience. Instances of pure diverisfication are rare and it is used only when no other growth routes are available.
Development of product life cycle analysis
Brand building , extention strategies product mix and portfolio management
The product life cycle is also helpful to the marketing manager because it suggests that certain types of marketing activity are appropriate at different stages of a products life.
Brand building is important in the growth stage . When the product enters the maturity and saturations stages, it will be the strong brands that will dominate the market. Profit will be the consequence, with weaker brands and producers leaving the market. In the decline stage , when sales are falling, it will be the strong brands that survice and produce profit.
It is possible for the marketing manager to take action to prolong the maturity stage or even to stimulate new frowth in the market by adopting product life extention strategies.
The product life cycle encourages management of the product mix. The product mix is sometimes called the product assortment, and it consists of all the products an organization offers to its customers. Managing the product mix invloves
- ensuring the existing products continue to satisfy customers
- modifying and adapting existing products to take advantage of new Technology , emerging opportunities or changing market conditions
- deleting old products that are close to the end of their life and no longer serve a purpose
- introducing a flow of new products to maintain or improve sales and profits levels and consequently securing the future of the organization.
An organization therefore needs a balanced product portfolio, capable of sustaining it satisfactorily into the future. The ideal portfolio should contain niether too many nor too many declining products. Too many new products put the organization at risk , as product launches require significant resources. At the other extreme , too many declining products could threaten the future of the organization.
Differentiated marketing and the product life cycle.
Limited resources , competition and large markets make it sometimes ineffective and inappropriate for organizations to sell to every segment. For the sake of efficiency , they must select some target markets. Manager may choose one of the marketing options in the below.
Stage of product L-cycle
Aims to sell single product and acquire many customers,segmentation is ignored.
Appropriate for introductory and perhaps decline stages.
Attempts to produce the ideal product for segment in the market
An option when market size is substantial normally during growth and maturity stages.
Tries to do severel version of a product, each aimed at different segment.
Possibly in growth and maturity stages, because the market is large enough to make it profitable.
Segmentation , targeting , product positioning and the product life cycle.
An important concept that affects the length of a product's life in the market is the product,s positioning.
Product positioning means finding out the crucial product features that are important to consumers, and designing the product accordingly . The most successful products are the ones which , compared with competition , match consumer requirements best. These are the products which will have longer product life.
Harrods, for example, is positioned as one of London's most exclusive department store. In order to reinforce this positioning with its target market, Harrods make sure that its products ranges , its staff expertise, its displays and overall atmosphere in the store are all of high quality. It is best in its quality and will as a consequence have a longer product life than other stores which don't reflect so well what the consumer expects. In simple terms , the best product will have a long life cycle.
Application of the marketing mix:
The marketing mix provides an excellent framework for developing marketing plans and meet the needs for consumers. The marketing mix consists of product, price, place, promotion and packaging.
This marketing has been explained above.
Evaluation of strategies:
There are several techniques available to evaluate marketing strategies or plans. Plans can be evaluated against overall company objectives, against the aims of a particular marketing plan or using the principles of marketing.
The results of marketing strategies can be evaluated for their contribution to overall organisational objectives such as growth , profit , providing public services, survivak or operating ethically.
Alternatively the effectiveness of marketing strategy could be evaluated using the particular aim of the marketing plan.
For example a marketing plane to obtain 3% share in French market within 12 months. An achievement of 2% would suggest that the plan has not achieved its objectives.
Finally an organization can evaluate its plans against the principles of marketing.
Based on the arguments as stated above Ford needs to act on the following principles in order to get the success.
Understanding consumer needs
Keeping ahead of competition
Communicating effectively with consumers
Using new technology.
Ford need to use latest technology with which they can produce the products of the standard of modern era .
They must need to show that they understand the importance of the technology and had strong technology research unit working to bring in latest technology in their manufacturing for customer
TASK 3--EXPLORE THE IMLPLICATIONS OF CHANGES IN THE MARKETING ENVIRONMENT FOR ORGANIZATION.
Kotler defines the general marketing environment as follows;
“A company, s marketing environment consists of the actors and forces that affect the company's ability to develop and maintain successful transactions with its target customers”.
Such a definition includes all the environmental forces outside the firm's marketing management function.
The marketing oriented firms places the customer, and the satisfaction of customer's needs and wants, at the very centre of all corporate thinking. Rather than establishing what the organization can produce and then going out selling it , it focuses on the genuine needs and wants of the customers.
The marketing firms operates within a complex, dynamic, external macro-environment. It is the task of the marketing oriented firm to link the resources of the organisation to the requirements of consumers within the framework of opprtunities and threats presented by this macro environment.
The macro environment
(assess the current changes and how the organization respond to the changes)
When we assess the implications faced by an organisations we can find out that there are many implications faced by an orgnisation such as
- changing implications
- political implications
- technological environment
- economic environment
- socio cultural environment.
- cultural and marketing implications
The only certain thing in this world is change. Sometimes change occurs so slowly that it is virtually impermeable. Organizations are often unaware that change is occurring until it is too late to do anything about it. At other times change is so rapid that, even though it is so obvious , organizations find it difficult to react quickly enough. Although none of posses the power to foresee the future, we can be sure that it will be different from today, and the change is fact of life. We have the little power to stop it and the sensible course of action to welcome change and attempt to adopt to it. However an organization can attempt to predict such changes through forecasting .the most current example of change is the recent recession period. When it first started in America it was quite expected that it go in other parts of the world and because world is a global village now if one business collapses its effects do damage in other businesses of the countries as well.
So the biggest implication faced by the the organization is to for caste the change and then to adapt the change effectively as well.
In order for a firm to be able to adapt successfully to changing circumstances, management needs to have an understanding and appreciation of the factors and forces influencing such changes. firms should attempt to capitalize upon changing rather than merely acting on it.
By identifying environmental trends soon enough management should be able at least in part to anticipate where such trends are leading and what future condition are likely to result from such changing. Recently we have seen that goldsmiths started aa advertisement spree on tv that they are offering cash for gold and after just months we see prices going high for gold, they rightly predict that gold prices are going.
In terms of speed of response we classify three types of firm:
- firms that identify and understand the force and conditions bringing about the change. Such firms adapt and move in line with the change.
- firms that fail to adapt to change earlier enough to become part of that change.
- firms that fail to realize that change has occurred or refuse to adapt changing circumstances.
In a mixed economy such as in UK , firms enjoy a considerable amount of autonomy.
Not only does the management of a firm have control over how it organizes and integrates its management fuctions, but generally it is free to decide what and how to manufacture as well as matters concerning price, packaging, advertising and distribution.
We see that these changes have also create affects of theis change. BA which is British Airways was a proft making organization and now it is going in severe loses resulting cutting in jobs and other benefits and also cutting in wages.
This is because it has failed to realise the change. In past there first of all there was no concept of internet ticketing. Now many airlines offer cheap online ait tickets. Many airlines such as Easy jets and others offer very cheap international fare whereas BA fares for domestic flights are more than their international fares. The other small airlines rightly foresee that people would be attracted for cheap fares in recession because nobody can afford heavy fares.
Because of normalization of the changes as what strategies other airline companies are adapting continue to charge people high fares resulting in dragging BA in loss.
Social ethical and environmental constraints on marketing:
Many international organisations base their codes of practice on international cose of advertising. The purpose of the code is that advertising is legal,honest,truthful,socially responsible and does not prevent competition.
Direct marketing association:DMA
The DMA protects consumers from inappropriate unethical behaviour bu unscrupulous or ignorant businesses. It promises best practice through code of conduct.
In addition to the general code of practice the association has developed others
Including a code pf practice for e-commerce, for electronic communications to children online, sms marketing and for e-mail marketing.
When consumers think that unacceptable language is being used that can complain to AS ,DMA OR Ofcom.
The competitive environment:
This means that where the organization hae no competitions . It includes gas and electricity but these companies also face competition not against each other but in the areas where substitute method of energy are being used. So nearly every company face competition. Whether a business has so many competitors or less competitors its management has to identify its competitor.
Management will also need to establish exactly what benefits competitors are offering to the the customers if its firms intends to compete effectively. Having done this management should then establish how its own firm compares in relation to competition. Only when management has a clear understanding of the factors and forces making up the competitive environment can it hope to compete.
These are other business firms and individuals who provide the resources needed by the marketing firm to produce goods or services. Nearly every business whether large pr small likfe Ford or Marks and Spencer has suppliers.
Ford possibly depend on hundreds of supliers and in the same way hundereds of the firms depend on Ford.
Purchasing is regarded as one of the very important factor of the management function in many organizations. The reason for this is that firms must have the ability to purchase these product at reasonable price and quality. The firm must also ensure that its supplier are capable of offering services at acceptable level on such matter as delivery , reliability, stock availability, servicing arrangements and credit fecelities.
Business have to decide what prodcuts they can make and what prodcuts they can buy for othe rsuppliers.
The role of culture
A society's culture is a completely learned way of life which is handed down from generation to generation. Culture keeps on changing and it is one of the big implication for the organization. Organisation needs to keep on looking the modern day trends in order to compete with its rivals.
It is govt legislation and laws which come into force time by time and organization has to abide by them. These include taxes, employment law, environmental law and other laws like sale of goods etc. Every country has different laws but there are certain international laws as well accpeted and practiced by all the countries.
Marketing management must understand the effects of many economic variables that are likely to effect their business operations.
Marketing firms have had to adapt to significant economies changeover the past 10 to 15 years. The most dramatic of these changes has been lengthy recessions.
A further development of economic was by UK becoming the part of EU.
Technology is a major environmental implication faced by the organization. It not only affects the firm's products and opertaions, but also the customer's life styles and consumption patters.
Management must be aware of the impact of the technological changes. the impact of the information technology has been particularly marked in the marketing research are. For example it is now possible to design and administer qustionaires via computer terminals.
Sales forecasting is an important marketing activity , and technology has also affected the way goods are distributed and generated.
More and more sale and booking are being made via internet. There are some stores which have no physical appearance but they are doing huge businesses through internet.
Organization must need to adapt to any latest technology and have specifically an IT related department.