Professional Documents
Culture Documents
Minimum number of crew Direct flights only Focuses on sub airports No food is served Minimum entertainment Only the transfer Only the hand luggage is free
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Marketing Tactics Quarterly Targets Sales Budgets Product Development and Launch Research Implementation Monitor Control
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CORPORATE Human Resources Information Technology Sales Finance Logistics Marketing Marketing Plan 1 (Product Range A) - A1 [promotional plan] - A1 [branding plan] - A2 [promotional plan] - A2 [branding plan]
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Consumer Products
Consumer products are expected to be bought by the end user. The product is further classified into sub groups, depending on the value, usage point or by features. 1) Convenience: Easily available, less brand loyalty, slight variance compared to competitors and mostly the generic products. 2) Shopping: Mostly semi durable appliances such as mixers, grinders, dry irons, washing machines, etc. This may require a guarantee, warranty, It can be payable through debit cards and value is more important than the price. 3) Speciality: Most of the time it is a high involvement product. Decisions will be taken after careful analysis and references, previous experience matters a lot.
Industrial Products
Industrial products are used and marketed differently than consumer products, since the target audience have different expectations. Raw materials and components: EX: Fabric, buttons, zippers, etc. Equipments and plants: EX: Huge machineries, warehouses, etc. Supplies: These are products required to complete the product using raw materials and machineries. EX: Cartridges, Ink toners, imaging units, etc.
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Managing Products
A marketer has to carefully balance the product range in order to be efficient or successful. Either; 1) Existing product can be well managed, properly branded and penetrate the market. 2) Introducing new products and extending the range. EX: Whale Submarine in Maldives tries to maximise their sales with the existing product by offering different packages and timings. EXII: During the recent years, Clique College have consolidated courses on IT, ACCA, Judicial Service and Language Proficiency.
AMOUNT OF INVESTEMENT +
Idea Generation
Screening
Marketing Strategy
Business Analysis
Product Development
Test Marketing
Commercialization/Launch
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During the introduction, a small quantity is manufactured, and then these products are tested with the actual target market. Later with corrections and amendments, you may come to the market aggressively with minimum variants (sizes, flavours, etc.) Once the product starts to make the profit and hits the break-even point, marketers can be very aggressive to get the market share. When the product reaches the growth stage, marketers introduce maximum variants and sizes. You may also develop own competitive brands to keep the competitors busy. At this stage, either catching up with competitors or challenging them is common. When reaching maturity, you may get rid of all ill performing brands and the successful brands are given high priority. These brands will be heavily branded until they become top of the mind. In the decline stage, two things can be done. That is either to re-launch or to introduce next generation products.
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Rogers diffusion model represents how a customer adopts a new product from the introduction stage to the end. As marketers, Rogers model is a good guideline when planning their product management.
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Pricing Decisions
Pricing decisions are based on two factors: 1) Customer and the market factor: Here, marketer will analyse the perception of the customer about the product, the value that they are willing to pay for the product and emotional aspects. 2) Cost Incurred: After considering the total expenditure and the profit margin which customers will also accept, pricing will be decided.
Pricing Policies
There are many reasons behind pricing strategies. Pricing policies consist of factors that influence the strategy to be chosen.
Cost Oriented
Industries such as FMCG, industrial goods, electronics are forced to cover the minimum price and reasonable profit margin. At minimum the product should cover the fixed and variable costs.
Demand Oriented
It is very common in general marketing. EX: Hospitality industry, Ticketing & transportation, some seasonal food products
Competitor Oriented
The pricing is totally dependent on the market conditions and competitor strategies. These maybe used when the market has a price war or monopoly or oligopoly conditions. EX: OPEC maintains standard prices to keep the demand.
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Influences on Pricing
There are many factors which influence the pricing decision. All these factors can be classified into three sections. 1) Corporate and Company factors Profit Margins Market share ideology Quality concerns Service factors Return On Investments (ROI) 2) Product Factors Product Life Cycle (PLC) stage Customers idea about the segmentation and positioning Quality standard of the product Packaging and storage requirements 3) Customer and Market Factors Demand Perceived Value Customer Benefit Competition Environment and Geographic factors
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Pricing Strategies
Pricing strategies help marketers to give a science behind their decisions. Choosing the right strategy should also analyse the pricing policies and the influences.
1) Price Skimming
This is where above the average price is quoted for the uniqueness, innovation or due to the strong brand image. Marketer should be careful to make sure that customers comprehend the uniqueness or difference.
2) Penetrative Pricing
When the product is generic or does not have any uniqueness/no market demand, marketers will have to adopt this strategy.
6) Competitive Pricing
6.1) Discounts: Either based on the volume or the value. 6.2) Menu Pricing: Here different options are given for customers to choose from. This is a better way to avoid brand image conflicts. 6.3) Promotional Pricing: Temporary action to overcome competitive barriers.
Managing Price
Managing price is one of the hardest decisions a marketer may have to make in his job role in the management. The following may take place: 1) To reduce the price of the product 2) To increase the price of the product 3) Compete with competitors
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Whenever you are making a decision on the above, marketer will have to analyse the following factors: 1) Cost: Variable, fixed and hidden cost should be considered 2) Demand Factors: When deciding on a price decision, elasticity and inelasticity of demand should be considered. 3) Break-even point: This is considered along with the PLC to understand how the pricing changes will backfire at the bottom-line.
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Distribution Methods/Channels
Direct Sales EX: Olive Garden Online Marketing EX: Air Asia Direct Marketing EX: Insurance and Savings deposits Tele Marketing EX: TV Representatives/Agents EX: Dhiraagu Indirect -> Retailers EX: Killi in Maldives Wholesaler -> Retailer EX: Philips Agents -> Wholesale -> Retail EX: Red Bull
Distribution Strategy
There are different channels and methods identified to move a product from the organisation to customer. All these methods are selected based on the strategic approach the organisation expects to implement.
Intensive Distribution
In this strategy, you may try to maximise the distribution range. You may perhaps even choose all the distribution channels. Price of the product will be low or disposable Suitable for low involvement products When the visibility is high, chances of selling is higher EX: Supari, Chocolates
Selective Distribution
Total solution is provided by the representative agent from spare parts to after sales. EX: Home appliances, paints, motorbikes, etc.
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Exclusive Distribution
When the product is of high value, then exclusive distribution is encouraged. Products will be of up market and high valued. High involvement products (EX: Housing, Vehicles, etc.) Packaging will be given high priority If the product is specialised, (EX: Consultancy, Media selling) this method can be used. Channel conflicts can happen when 2 or more channels overlap or when one channel is been made cut by another. When managing the distribution process, few things should be considered: Strategies Product Factors Seasonality EX: Cashew nuts Rate of turnover EX: A house for lifetime Product Life Cycle (PLC) EX: Some softwares have a short life span. Perishable: If the goods are not durable, distribution method should be changed. Image of the product should suit the packaging and distribution. Requirement of the Seller Competition which may come from price, brand or margin Intermediary attitudes in how the supplier considers control and other supportive factors
Franchising
Franchising is the easiest way to expand business overseas and gain exposure with least investment. Brand name and training will be provided by the Franchisee.
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Promotional Mix
Advertising Personal Selling Direct Marketing Public Relations Exhibitions Packaging Posters and Flyers Hoardings and Danglers Internet and Social Media Point Of Sales (POS) Materials
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Promotional Campaigns
Promotional campaigns are in nature aggressive, short term and win-win for customers as well as the organisation. This may run through up to 3 months. Promotional Campaigns may require lot of effort from marketers in terms of critical thinking and implementation. EX: Clique College will be launching first Herriot Watt Marketing Batch in Jan 2013. Make a campaign plan to promote the event. After deciding to go for a promotion, marketers come out with a promotional plan which is represented through GANT CHART. These promotions are done in 3 ways: 1) Burst Campaign 2) Drip Campaign 3) Mixed Campaign When creating a promotional campaign, a marketer must consider the following factors. 1) How much does the campaign cover in terms of target audience 2) Cost of promotion (marketers have to mind per head cost, return on investment as additional customers, etc.) 3) It can either use attack, defence or protective strategy
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Purpose of branding
1) 2) 3) 4) 5) To give a unique identity Avoid stereotyping To make a demand To last longer To give an advantage through service EX: A car painting garage will be able to differentiate their product through service. 6) Advantage through other intangibles EX: Coca-Cola stands out from the competitors due to branding.
Brand Loyalty
When a brand repeatedly satisfies a customer and if it has been marketed through proper advertising, branding comes into action. Brand Loyalty is when a customer naturally tends to purchase a product and to buy it repeatedly. EX: A normal Starbucks customer visits 6 times per month while a loyal customer visits 16 times per month; meaning higher frequency of purchase.
Brand Value
A brand value is measured in 3 ways: 1) How much income does it bring to the organisation 2) Market approach which compares it to other similar organisations 3) Cost approach where the amount of money is spent on building the brand is considered
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Brand Erosion
Due to different reasons, brands get diluted or disappear from the market. 1) Private Branding EX: TESCO starting their own range of products 2) Brand Forgery Some brands have many plagiarisers which will ruin the original brand. EX: BOSS vs. BOOS 3) Negative Brand Associations EX: Pepsi had to face many problems when Michael Jackson had a fire accident. 4) Bad business practices EX: Nike was accused of using child labour in Bangladesh 5) Act of God / Natural Causes Certain airlines did not recover after 2001 downfall 6) Grey Marketing This happens when the marketing activities are unclear and difficult to gain confidence in the public.
Building Brands
This is a long term expensive task which requires lot of commitments, plans and long term vision. Branding can be done in 3 ways.
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2) Range Branding
This is where one company has different ranges for different products. This helps the organisation to concentrate more on each product separately. EX: Companies such as Unilever, Proctor & Gamble (P&G) and Coca-Cola use this method. It makes it difficult for competitors as it covers all gaps in the market.
Developing Brands
This is a difficult management decision to make and have to consider many aspects of it. 1) Analysing the effect of the existing brand is very important as it may ruin the current brand image 2) Compatibility and suitability for the global operation. Name, colour, symbols should not make issues in the global standard. Certain brands may have ethnic issues such as the cross in the Anchor label in Middle East. 3) Potential Growth Ability: Having the expansion facility both horizontally and vertically will give the opportunity in the long run.
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Service Quality
Service quality is analysed by marketers to measure the standard of service. Measuring quality correctly is very important in the customers point of view. There can be many reasons for a service to not reach the expected standard. This is explained by the gap model.
WORD OF MOUTH PERSONAL NEEDS PAST EXPERIENCE
EXPECTED SERVICE
CUSTOMERS
GAP5 GAP1
PERCEIVED SERVICE
SERVICE DELIVERY
GAP3
GAP4
ORGANISATION
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Gap model is used to find out the difference in the service expectations in accordance to the views of customer and organisation. It also analyses gaps within the organisation.
In Not for Profit sector, also called as the third sector, the main purpose is different to what public sector does (Electoral Mandate) and what private secto r does (making profit). Third sector satisfies those who have a need but neither of the other parties is interested to satisfy. EX: Blue Cross is a society which comes forward to control cruelty towards animals. There are governmental and private sector N4P organisations. National Lottery in UK is a government formed N4P; while Bill Gates Foundation is an example for private.
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Situation Analysis
Here, we analyse what happens inside the organisation, as well as what happens in the outer environment. Therefore it is analysed in two areas. 1) Internal Environment (Micro Environment) 2) External Environment (Macro Environment) In the external environment, marketers are more concerned about financial difficulties, developing trends in customers and other relevant factors.
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5) Threat of substitutes: Instead of choosing a chocolate, a customer may choose an ice cream. Therefore, the product range has to be fought against as well.
1) Using an organisation of your choice briefly describe porters five forces theory model and explain how it can be used as a basis for investigating industry competition. 2) A) Describe what is meant by a hierarchy of plans.
Corporate Plans Set according to the company vision, mission and objectives analyses financial aspects, shareholder perspectives brand equity and qualitative measures. Regional Plans This is where organisation gives priority, for the regional advantages. EX: Asian region for manufacturing and European region for service and research. International Corporate Plans Each country or SBU is considered with a unique plan. By default, this should be in line with regional and corporate plan. EX: Marketing Plan, Sales Plan Tactical Plans This is to achieve midterm objectives and target. EX: First quarter sales, market share, etc. Operational /Functional Plans - day to day activities Contingency Plans - are used to recover when the original plans are not in time. EX: In case of a Tsunami, to divert production to an unaffected stable area.
B) Identify and briefly describe the various types of plans that the strategic marketer is likely to come across when working in a multinational company.
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Segmentation
Main purpose of segmentation is to differentiate the company from the rest of players. If successfully segmented, target market should not have a second thought or confusion regarding the choice. When you segment successfully you should be able to: Focus activities: Diabetes Association of Maldives organising awareness walks To reduce risk: Memory plus is for instant memory power Battle Competition: Traders Hotel offers 5 star facilities in Male Understand the customers: Pizza Hut realises the need of having spicy menus in the Asian markets. Helping in Planning: Harley Club and Ferrari Club know exactly what their customers want
Targeting
When targeting a market, strategic marketers may have to look into the following: 1) Loyalty: CFL bulb market 2) Price sensitivity: Marlboro 3) Ability to cross spend: A Philips TV buyer may choose to buy a Philips Home Theatre and DVD. 4) Growth Potential: Villa College utilises their resources into segments such as diving schools, Islamic studies, psychology
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Positioning
Commonly used techniques are positioning maps and perceptual maps. The positioning is done in the consumers mind. Therefore it requires lot of effort and money apart from time.
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Using a company of your choice explain how strategic marketers can approach new business opportunities successfully. P.s. students can use analytical methods such as SWOT or PESTEL
Marketing environmental analysis is given high priority when analysing and making strategic marketing plans. Having a clear idea on the strengths, weaknesses, opportunities and threats gives marketers the opportunity to look into hidden factor and also for future developments. External environmental analysis helps the organisation to prepare well in advance for uncontrollable factors such as PESTEL factors. Having a clear vision, understanding and in-depth knowledge may make the marketing plan more synergetic and realistic. Fuel Supplies Maldives (FSM) is a well known organisation in Maldives for supplying of fuels. It is a government owned entity which is responsible for social welfare and also for profit making. When FSM is doing strategic planning they may use environmental analysis in many different ways to make it more appealing and realistic. By understanding their strengths and weaknesses they may decide on the competing strategy. As they are the market leader they may use this strength to capitalise on the market share. They may often miss the weakness as the focus is more on opportunities. FSM may have difficulty in being flexible, and turn around will be slower than the competition due to bureaucracy. FSM may find different opportunities in the market and as the flexibility is the problem they may plan well in advance. They may approach upcoming resorts and airports with a better proposal. As Maldives is highly affected from global warming, fuel consumption may be considered as a social responsibility. Therefore FSM can take precautions and develop a green attitude. Around the globe solar energy, wind power, turbine energy is more appreciated than fuel energy. Therefore FSM may include a contingency plan if alternatives are encouraged. Technological developments may force to bring changes in the product. Therefore future techno aspects will be analysed by FSM such as 98% octane petrol.
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Economical factors such as exchange rates and environmental factors such as Somalia Piracy may happen anytime. Analysing the environment helps the organisation to keep a healthy margin of profit and insure while transporting, etc. As mentioned above an organisation can make their marketing efforts and plans much successful by analysing the environment. Also, it gives additional point of view and dimensions that havent been thought of to the planning process.
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MANAGERS
MARKETING ENVIRONMENT
Marketing Intelligence
Marketing Research
- Political - Economical - Social - Technological - Environmental - Legal - Pressure group - Competitor - Customer - Supplier
Feedback
Utilising MIS
MIS is used to filter loyal customers and to implement CRM strategies towards them. EX: Emirates Airlines offers skywards, free mileage flying for frequent flyers. It helps the company to decide future business trends and to come up with proper plans. EX: Emirates came up with a joint venture to Qantas (Australian Airline) seeing the growth potential in the eastern world.
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It is a good tool to analyse the internal and external synchronisation. EX: Emirates understands their customer preferences and staff are well aware about the customer needs. They have a cabin crew member who understands and speaks in customers language. It helps to understand the hidden reasons behind a customers thinking process and it notices the factors that may be ignored by a manager. EX: Emirates have state-of-the-art entertainment system I C E which offers something for everyone. MIS may improve the service factors through research techniques. EX: Emirates is committed for continuous training and development for their staffs.
Marketing Research
Marketing research is the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services. Marketing Research is carried out in two ways: 1) The Pilot phase- This is where when you research the data that is already available. Therefore it is also called as Secondary research/Exploratory research. Since it is convenient, it is also called as desk research. 2) Primary Phase: Here, an in-depth research is being conducted with fresh objectives and probably in the field (maybe in a laboratory, where real business takes place)
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Problems in a research
Marketing research can be misleading or can become useless due to following reasons: 1) Accuracy: A research is carried out to identify an exact problem or to find a solution. Therefore inaccuracy may take off the sole purpose of research. EX: Regarding a research of an infants baby oil, it is a must to considers mothers opinion as well. 2) Cost: To get a better result, sufficient sample size is a mandatory factor. When sample is too small, it may not reflect the population. This often happens when the budget is not enough to conduct a proper research. 3) Safety: Often people suspect that their information will be misused. Therefore they may avoid the research or give false information. EX: When a middle class individual is asked regarding his life standards, answers tend to be exaggerated. 4) Time Factor: Certain research requires time to gather and analyse information. When the time is limited, high tendency for shortcuts and convenience samples. This may give a wrong answer to research problem. 5) Errors in conducting research 6) Researchers knowledge levels 7) Literacy rate of the audience
Secondary Research
Secondary research is also called desk research, pilot research, desk research, etc. It is the first phase of the research where already available information is being analysed and interpreted. Mostly it is available for free, or can be bought at a very reasonable price. EX: Customer panel research which can be bought for few dollars. This may have all the information regarding TV channels, programmes and audience viewing rate.
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Most common secondary research sources are publications by the organisation; annual reports, invoice and delivery reports. Others include government publications, statistics, and ministry publications. Internet and websites, magazines and newspapers can also be classified as other sources. Secondary research is conducted first, because it gives an idea in advance to the raw data collection. It also helps to find customers for sampling and research, and at times to eliminate the need of research.
4) Direct Marketing: This helps to maintain one-to-one relationships with customers. This may use all the possible media available. 5) Electronic Marketing 6) Customers: Rather than looking at the customer in one point of view organisations started to value different perspectives.
Is CSR Necessary?
Since organisations are profit motivated, it is often questioned whether a CSR is necessary. It is necessary because business is conducted in the society; therefore organisation is responsible for their well being. Is the organisation supposed to undertake social welfare and address broader issues? In long term sustainability, businesses benefit from CSR.
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Will the business get powerful in the society? Since business employs skilled and capable staff, why not address these issues? What if the competitor spends that money for promotions and product improvements? This may look profitable in short-term, but by the time competitors realise social issues, CSR will come in handy. Organisations specialise in resource management and not social welfare management. Organisations and employees take responsibilities in each of their job task, and therefore they are qualified to address social responsibilities as well.
Internal Marketing
Until recently, employees or whoever works very closely within the organisations parameters were considered as secondary. Only after many practical implications they started recognising internal staff as well. Any activity which is more like marketing which motivates employees to work towards organisations goals is concerned as internal marketing. EX: Segmenting them in different categories, hard working, loyal, smart, etc. EXII: Grievance/Complaints hotline EXIII: Suggestion Boxes EXIV: Corporate internet & intranet facilities EXV: Company organised events, staff together, inter departmental tournaments and recreational activities At the same time, there can be negative motives towards internal marketing, due to cost, time and low engagement levels from staff.
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Internet marketing, also known as online marketing is used in 5 ways commonly known as online marketings 5S: Sell To a global market Serve To provide additional information or service Save By reducing traditional methods of advertising Speak One-to-One Sizzle Impress visitors by a grand website At the same time, E-marketing has a few unique characteristics. This is studied under 6Is Interactivity Intelligence Individuality Integration Industry restructuring Inventing new distribution channels Independence of location
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Capabilities of E-marketing
As a research and planning tool As a distribution channel Customer Service Communication and promotions : Travel agents, tour operators, book stores and supermarkets, etc As an advertising medium
New Media
Due to the growth in virtual media, there are few new media, which are now dominating the market. Email marketing campaigns Viral marketing, also known as word of mouse, where one individual share one event to their friend Wireless marketing/mobile marketing Interactive television: A good media for instant feedback, used in voting, product search, banking and gambling.
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SME Market Share is small : Low turnover Often, owner or family members or few individuals are in the management Attempts every opportunity possible, more practical and lacks marketing skills Lack of resources money, skills and people Generic Solutions Easy to enter, easily faded Individuals get multitasked Very flexible Lower wages, lack of training, limited benefits Average 5% success rate Provides many job opportunities and operates locally most of the time
Large Organisations Market share is large : High Turnover You will have a board of directors, HODS and consultants as well More Strategic, long term plans with a proactive approach Enough resources and financial strength Specialisation Stable long term growth Clear responsibilities, limited range Bureaucratic Higher salaries, better benefits and training Grow multinational Downsizing and operates in all markets
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Developments in SMEs
Exporting/Importing International niche market EX: Maldives exports sea cucumber as a highly demanded product Direct Marketing EX: Resort Supplies in Maldives purchase products around the world on behalf of the resort Being part of MNE (Multinational Enterprises) supply chain (piggy packing)
Entrepreneul Marketing
There are a considerable amount of SMEs who are willing to take the challenge when there is an opportunity, while critics and experts forecast different ideas about it. They are willing to learn on the way and they consider expert opinions to minimise the obstacles. Entrepreneurs will be very committed, hard working and they adapt and learn fast to survive. At times they end up in a disaster but it is only a learning curve. Through entrepreneul marketing, businesses have learned to include the following into any organisation culture: 1) 2) 3) 4) 5) 6) Managements commitment and dedication towards innovation Encouraging innovation internally Certain degree of risk Flexibility and adaptability Finding the niche and uniqueness Cross selling and up selling
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Organisational Structure
Large organisations will have a different culture to SMEs. At the same time these structures will be deciding the output of the efficiency and decision making.
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Product Checklist
1) 2) 3) 4) 5) 6) 7) 8) Market Share Consumer likes and dislikes Historical sales trends Seasonality Capacity and the usage Return on Investment Product definition and benefits Product Life Cycle
Price Checklist
1) 2) 3) 4) 5) Are pricing objectives appropriate? Price and other 3ps Stage of PLC, competitor pricing and customers response to the price Discount, differentiated pricing and their effects on profit margin Is there any requirement for price promotion?
Place Checklist
1) 2) 3) 4) 5) Does the product reach the consumer as expected? Is the distribution cost included in the price? Manufacturers control over the distributional channel Strengths and weaknesses in distributional channel Market coverage
Promotional Checklist
Promotional activities are audited in 2 ways: 1) Overall promotional audit: Here we analyse all the possible options and functions together In this way, we try to audit the following: a) What is the overall promotional objective (Is it for rebranding/increase sale/survive)
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b) Is it realistic? Is it happening? c) Do these promotional activities: I) Create Awareness? Awareness can be tested through recall tests. At times, recognition tests are also used. II) Do they affect the attitude? To check the attitude, we may use attitude tests and in-depth research. III) Generate Action? Response or action can easily be monitored via sales or via activity.
Personal Selling
Personal selling is a very expensive and time consuming promotional method. Therefore it should be audited carefully. It can be measured through: 1) 2) 3) 4) Number of calls made Number of calls vs. orders received Achievement of sales target Profitability
Sales Promotions
1) Increase in sales 2) Number of new customers attracted 3) Preventing competition Marketing research is conducted with the motive of collecting first hand data. Therefore research has to be done very accurately and with a proper plan. This helps to minimise time wastage, error and other resources. In general, a research or plan process will have the following steps:
1) Set Objectives
Here, we analyse what we expect to find out and set targets and goals.
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10)
In PDF, PowerPoint, printed book or CD/DVD You are the marketing manager for a small shoe manufacturer that employs 20 people. Owner of the business wishes to order to new overseas markets. Write a short report detailing various options that should be considered and recommended and justify your required option. Born globals and franchisers along with joint venture are dominating the international market. Large organisations such as Wal-Mart, Starbucks, KFC, General Motors & Electrics, P&G are invading domestic and rural market, where the survival and existence of SMEs itself is a challenge.
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Being given the scenario, SMEs are forced to come with innovative solutions and to expand business globally through different means other than franchising, joint ventures or buy outs. Therefore, SMEs have adopted the following options to enter the international marketing arena.
1) Exporting
Exporting is quite a traditional method, but comes handy when you are more focused on domestic market and when you need to sell the excess production. A shoe manufacturer may have excess quantity in certain designs and some models considered as very slow moving. This can be used for bulk exporting.
3) Direct Marketing
Direct Marketing using each channels and websites, SMEs can reach the world quite easily. But for a shoe manufacturer, this might not work effectively when logistic charges are added.
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Organisational Stands
Organisations enter to the business scenario in different context with high investment and innovative product. EX: SONY launching Play Station 2 (PS2) to reach the market leader position. At the same time, some companies will have an innovative product, but with less investment to become the first in the market. EX: Even though Panasonic were the first to introduce 3D technology to the market, SONY capitalised on it through promotions. Therefore, we mainly categorise 3 market stances:
1) Market Leader
Market Leader should be innovative, so that they can be in the forefront of the competition. They should do fortification to keep competition activities at minimum. Confrontation should be done by using aggressive and by getting into price wars, harassments through pressurising the distribution channels and criticising competition.
2) Market Follower
Market Follower may benchmark the market leader, but can gain advantages through superior service, flexibility and by overcoming the short falls of market leaders products, even though they cannot boast by saying the leader or innovator can easily gain market share from the need created by the leader and superior distribution systems. Brand loyalty will be less, but sales growth will be easier.
3) Market Nichers
Market nichers focus on limited amount of customers, while enjoying higher profit rates and provide unique services, which others seem to ignore. This is not possible if there is no uniqueness or talent.
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Porters Generic Strategy Model COMPETITIVE ADVANTAGE LOWER COST FOCUS DIFFERENTIATION COMPETITIVE SCOPE BROAD
COST LEADERSHIP
DIFFERENTIATION
NARROW
FOCUS
When Porter analysed successful organisations, he found 3 sound strategies underlying beneath the success factor. These are called Porters Generic Strategy Factors
1) Cost Leadership
When organisations are quite large, then the investment is high and organisations have the opportunity to manufacture in large scale, and thereby achieve economies of scale. This way organisation does not have to compromise that quality, at the same time, any excess production can be exported to international markets. Organisation should be careful to communicate correctly, that the product is value for money, and not a low quality product. Cost Leadership is possible by large organisations and at anytime a competitor might go lower than you to challenge.
2) Differentiation
This is suitable for innovative and organisations with Unique Selling Propositions (USP). This means organisations should have an advantage, which the competitors cannot match. This way, organisations can sell even at a higher price, with a reasonable margin. EX: While others are focused on inbound and outbound tourism, Virgin group initiated space tourism.
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3) Focus
Focus strategy is more towards niche market, and will be focused on few clients, but specialised total solutions. EX: Rolex watches, Intel processors, etc.
Porters Profitability Curve clearly represents how a cost leader and a differentiator gains bigger market shares. By gaining more customers, they gain a higher Return On Investment (ROI). Focus strategy may not entertain many clients, but will enjoy higher profits, and therefore higher ROI.
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Using social networks have a high probability of going negative if not managed properly. One negative comment may reach a million audiences in no time. Marketers tend to exploit social networking through the following areas:
2) Brand Building
To bring the brand to customers proximity was a challenging task and many companies had only TV, press and radio to reach households. Through organising communities, by interest groups, circulating hot topics within the group may help brand building.
QUESTION: ???
Outline McKinseys Seven Ss model and explain with examples how it can be used to analyse the internal environment of an organisation.
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McKinseys model was initially introduced for strategy selection, but now it is used as an internal environment auditing tool. The steps identified by McKinsey can cover all aspects of internal marketing. Structure: Represents how the chain of command and reporting works with expansions and new products, structure may require changes. Strategy: This analyses the internal management strategy, which may be autocratic or democratic. It also covers the strategy to unite the team. Systems: It may be either procedure or software used. Style: Communication, management and behavioural, as well as controlling styles. Staff: Skills: What are the training and development programmes, how best the talents are used and are the right skills in the right designations. Shared Values: On what basis the organisation promotes, builds reputation and sustains business ethics.
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