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Business marketing - Case Study Example

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This way, the company is able to get feedback from the end users of its products in order to inform its decision to improve or retain their qualities. This also…
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Business Marketing Business Marketing The strategy of AAA Office World Distribution of its own products through a network of retail stores is a good aspect of AAA Office World strategy. This way, the company is able to get feedback from the end users of its products in order to inform its decision to improve or retain their qualities. This also saves the company the disadvantage of going through intermediaries in order to get its products to the end user. The policy of selling its own products without going through dealer branding is another desirable element of the company’s strategy. The fear of the danger of over-depending on a customer is pertinent because customers can be attracted by a more appealing offer by another producer or service provider. Quality is AAA Office World’s surest way of establishing a good market standing (Kourdi, 2003).
The fact that the company’s strategy involves both regional and local suppliers shows that it has vast presence. It is prudent that AAA prioritizes new-product development. Continuous product development helps diversify the company’s offerings. However, product development requires many resources and can easily overshadow promotion of existing products. Product promotion should also be allocated more resources because it will not only help inform many customers of the company’s products but also instigate hype for its new products. Hype would be assured for AAA because its existing and new products deliver on the things that consumers are promised. Promotion will make customers to look out, always, for AAA’s next product (Ireland et. al., 2012).
What Stasia Acosta should do about Business Center’s offer
Stasia Acosta should consider taking up Business Center’s offer. One of the reasons that underpin the feasibility of this move is the fact that AAA has excess capacity and could handle Business Center’s orders and still have enough to supply its other stationers and suppliers. Such a production capacity would have the advantage of expanding AAA’s distribution network because it would capitalize on both Business Centers many vast presence and that other supplies. It is fortunate that Business Center is seeking the line of file folders that brings Stasia 20 percent gross margin only. The performance of this line of file folders needs a move that will help raise its gross margin to be at par with those of other lines of file folders. Doing away with this line of file folders is the other option that Stasia can consider to deal with its minimal performance but this option would be tantamount to the “commodity end of the business” that Ramon works so hard to avoid (AAA Office World (AAA)*, n.d.).
The move will help secure market share for AAA because superstores are kicking many local stationers, which form the biggest part of the company’s distribution network. Getting the said line of file folders would give Business Center’s the muscle to compete with these superstores. Additionally, AAA can use Business Center to make up for the market share that it will lose if local stationers form the buying groups they are contemplating forming. Luckily, AAA stands a chance to benefit because superstores still buy directly from it. There is a possibility that if AAA does not accept Business Center’s offer, it will still get another manufacturer and it will stop selling AAA’s file folders. This possibility is underpinned by Business Center’s good reputation in the industry (Kourdi, 2003). AAA will also enjoy economies of scale that will help reduce its variable manufacturing cost hence Business Center’s offer is profitable. Finally, Stasia needs to cite these reasons to Ramon to help shift his focus from new-product development to seeing the viability of allowing Business Center dealer-brand its file folders.

References
AAA Office World (AAA)*. (n.d.). Class notes.
Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding business strategy: Concepts plus. Mason, OH: South-Western Cengage Learning.
Kourdi, J. (2003). Business Strategy: A Guide to Effective Decision-making. London: Economist Books. Read More
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