Strategic management report on: Marketing strategies
Executive Summary
This assignment takes into consideration answers for the following three questions. The first question states that “Marketers have become more strategic. Discuss this statement backing your argument with researched text & describe how this can be applied within your organization”. The second question talks about “Demonstrate how the various trends shaping the business landscape within the macro-environment by explaining & providing examples of each trend”. The last question states “Today companies have to become more diverse in their product offering. What are the characteristics of products and how do marketers classify products? Provide examples of companies who have become more diverse and why you think they have had to do so”.
Introduction
Marketers have become more strategic. With globalization & increased levels of competition, the companies have to take up various marketing strategies which would help them to be a step ahead of its competitors. Therefore, various Porter’s generic model shall be taken into consideration which would help the organization to be a step forward as compared to its competitors.
There are various trends which would help to shape the business landscape within the macro-environment. The three main trends discussed in this assignment are macro environment trend, social & environment and business & industry trends.
Q1. Marketers have become more strategic. Discuss this statement backing your argument with researched text & describe how this can be applied within your organization.
Ans1. Marketers have become more strategic. With globalization & increased levels of competition, the companies have to take up various marketing strategies which would help them to be a step ahead of its competitors.
Kotler has provided a generic model as one of the tool of strategic management. This would help any organization to be a step ahead & attract more number of people. According to the porter’s model, there are three main competitive strategies which would help any organziation to have a competitive edge i.e. Focus, Product Differentiation & leadership in terms of cost.
Þ Cost leadership: The first strategy which would help any company to have an edge refers to leadership in terms of cost. The company should adopt various technologies which would help them to manufacture the automobile at a low cost as compared to its rivals. This would help the company in order to earn high levels of profits thereby, compensating the cost through the customer’s pocket. The main risk by adopting such type of strategy would be that, the rivals or the new entrants would practice the same by compromising upon the various important costs (Porter, 2008).
Þ Differentiation: Product differentiation refers to the next best strategy which would help the company in order to have an edge over its competitors. Differentiation in terms of quality of the product, services provided to its customers, better performance of the products or services provided by one organization in comparison to its rivals. Though, differentiation would have to incur extra cost in order to promote or advertise the product. A huge amount of investment would be required by an organziation to differentiate its brand image as compared to its competitors. The major risk involved by adopting this type of strategy is that an extra cost has to be incurred upon the tow wheelers so manufactured. Premium pricing would be practiced by the same. Customers might switch towards the rivals due to the high cost so incurred.
Þ Focus: The last type of strategy to be adopted by any company would refer to proper focus. This means that, the organization should be quite focus upon what is it doing, how much product shall be manufactured depending upon the demand, etc. It should have a clear understanding regarding the target audience it serves to taking into consideration the needs as well as requirements of the same (Porter, 2008).
Q2. Demonstrate how the various trends shaping the business landscape within the macro-environment by explaining & providing examples of each trend.
Ans2. Some of the macroeconomic trends which have helped to shape up the business landscape have been discussed in this part of the answer.
Macro Economic Trend:
Þ Consumer landscape would be able to change as well as expand the environment in the most significant manner. Shifts in the developed countries would lead too high levels to changes. For example, in the year 2015 the spending power of the Hispanic population would be equivalent to 60% of the entire Chinese Population (Murphy & Enis, 2006)..
Þ With liberalization as well as technological advancements will lead to high levels of high levels of developments of the capital markets. The macroeconomic trend would take into consideration advancements of technology, developments in the capital markets, shift in the demographics, etc.
Þ The various public sector activities would lead to increase the levels of productivity as well as benefit the enterprise in the best possible manner. The aging of the population would be developed which would help to create a better as well as more effective & efficient sector (Murphy & Enis, 2006).
Social and environmental trends:
The second macroeconomic trend refers to the social and environmental trends. Such type of trends would be responsible to impact the business at large.
Þ Technology has been playing one of the most crucial roles which would help to connect as well as transform the way with which people live. People along with various business houses have been using information technology (IT) in the best possible manner. Various developments in the field of IT have led to move a step ahead as compared to what it was before using IT (Davis & Stephenson, 2006).
Þ The role of big business houses within an increase in the overall environment would lead to suspension of the big business houses. Scandals, mis-happenings within the environment would seem to be quite inevitable.
Þ With an increase in the levels of natural resources, the economic growth would help to accelerate the emerging markets. Innovation in technology & he use of resources would help to create a world which would help to compel economic growth as well as have a sustainable environmental demands.
Business and industry trends:
With the various changes within the business & industry trends would lead to an overall change in the structure of the emerging industry. With the changes in the regulations of the market, various non-traditional models flourished within the same space or sector. One of the examples refers to the appearance of the private equity financing within the corporate ownership as well as the expectations amongst the performance.
Þ With a change in the business & industry trends, companies are managing different types of technologies. The improvised technologies have helped to give rise to new management concepts & approaches which would benefit the enterprises in the years to come. Decision making techniques would be quite helpful to the companies which would help to attain competitive advantage as compared to its competitors (Downs, 2001).
Þ Use of an in depth knowledge would be quite helpful to increase the levels of specialization & at the same time lead to the availability of infinite information. The various new models would be quite helpful to provide high levels of production, have access to information, ownership, etc. This would help to give rise to the various approaches & practice innovation (Davis & Stephenson, 2006).
Q3. Today companies have to become more diverse in their product offering. What are the characteristics of products and how do marketers classify products? Provide examples of companies who have become more diverse and why you think they have had to do so.
Ans3. With increased competition & high levels of globalization, these days’ companies have become more diverse in the product offerings. The characteristics & classification of the products have been discussed in the following portion of the report. They are as under:
Characteristics of Products:
Þ Tangible in nature
Þ Products can be delivered
Þ Product is made with the help of a manufacturing process
Þ Products are standardized in nature
Þ Ownership is possible in products
There are mainly four types of classification for the products. They are as follows:
Þ Convenience Products
Þ Shopping Products
Þ Preference Products
Þ Specialty Products
Convenience Products:
Based upon the figure above, convenience products have been ranked one of the lowest in the graph. This is because it is low in terms of effort as well as the risk factors involved in it. Such type of products refer to the type of product where in the customer would not spend high amounts of money & time while buying such type of goods. The consumer will also not have high levels of risk involved in the same. The convenience goods have been referred to as commodities which are majorly available at the normal grocery stores (ENotes, 2011).
The examples of convenience products or goods come under the category of fresh grocery staples, batteries, umbrellas, different raw materials used by the industrial buyers to manufacture different goods & commodities.
Preference Products:
The next category of goods which has been highlighted in the graph above refers to Preference Products or commodities. These refer to the type of products which require certain level of time & risk involved in the same. The main difference between the convenience & preference good is in regards to the risk factor involved while buying the same. The risk factor attached to the preference goods is mainly due to the levels of marketing strategies & advertising done in order to market the product or the commodity (Henry, 2004). It has been seen that, many companies are quite successful in convincing the customers towards them. The unique selling point captured by the companies is that, they provide branded commodities at low prices such as Bayer Aspirin. Some of the common examples of preference goods are toothpaste, soft drinks, etc.
Shopping Products
The third classification of products refers to shopping products. These refers to the type of products where in the consumers are willing to buy the products. Significant amount of time & risk is involved while buying such type of products (Henry, 2004).
High levels of risk have been attached with such type of commodities. Some of the examples of shopping products are automobiles, furniture, equipments, industrial commodities, insurance, dental care, etc.
Specialty Products:
The last category of classification in products refers to the specialty commodities or products. This refers to the type of product wherein the consumer will rely upon only one brand rather than comparing it with any other brand. Some of the brands which provide specialty products to the buyers are Stanford University, Maytag, etc (Davis & Stephenson, 2006).
Such type of products has been allocated with high levels of risks & efforts. The prices charged for such type of products are quite high in regards to the quality of good provided to the customer (Marketing Basics, 2011).
Some of the examples of specialty goods are imported wines, paintings by experts, sports car, etc. Some other examples of specialty products or commodities would be a heart surgery by a heart surgeon, etc.
Some of the companies who have had diverse product classifications are Nestle,. Some of the reasons as to why they practiced diversification have been discussed a sunder. They are as follows:
Reasons to practice diversification:
In order to grow within their sector, the companies practice various diverse strategies. These strategies would be quite helpful as well as advantageous in the years to come. Some of the reasons are:
Þ The large market share of the enterprises would lead to economies of scale. The learning curves along with experience curves would help to produce the products at a low cost. With the help of high levels of experience, the organization would be able to have an improvised layout which would help to redesign the products, effective labor efficiency, qualified staff members (Poter, 2008).
Þ With the help of diversification, the large firms would be able to gain knowledge regarding each & every unit. Big enterprises which have been relying upon research & development would be able to use various techniques t build up different commodities & attain competitive advantage as compared to its competitors. These activities would prove to be highly advantageous (Murphy & Enis, 2006).
With the help of diversification, the various strengths & weakness of big companies would be able to improve the various linkages within the different stages of production. The links would be quite helpful to have better distribution channels, practice more efficient as well as effective advertising & marketing strategies (Stanley, 2007).
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