A New Computer System for Staples - Case Study Example

A New Computer System for Staples (Part 4) a. Marketing in diverse countries will give Staples broad opportunities. Primarily, it can be a source of competitive advantage. Clearly, some organizations in the same industry are more successful than others, lending support to the view that competitive advantage is largely internally developed. Equally, however, there is a danger of ignoring the international environment, as customers and their needs, competitors, changes in technology, etc., can play an important role in determining competitive success. Nevertheless, marketing in diverse countries does not mean entering every country in the world. Primarily, it is needed for a widening of market operations to cover the world in scanning for opportunity and threat. The decision to enter markets outside the home country depends on a company's resources, its managerial mind-set, and the nature of opportunity and threat (Keegan, Green, 2003). Marketing in diverse countries allows Staples to reach wider target audience and take market share from an established competitor. Using the market research Staples can develop new products for existing markets or develop new products for new markets. The advantage of product originality will allow Staples to create a strong international brand image. Brand loyalty will also be important factor in increasing the costs for customers of switching the products of new competitors. Using an international market development strategy, Staples will capture a larger share of a market for current products through market saturation and market penetration. Taking into consideration rapidly changing environment and customers expectations it is not enough to operate only on a national market. Global marketing will help Staples substantially increase the level of sales (Evans, et al 2004). To get the message different types of media will be used in accordance with particulate audience. Media selection will involve choice between alternatives. Therefore, for maximum penetration it may help to select primary (first choice) media that interlock or cross support each other. If deeper penetration into the same target market, for example, is required, then vertical advertising in the media that reach the same target market will be sought. For example, advertising on commercial television may be linked with advertising in the magazine that provides the programme schedules for viewers, or local radio advertising in an area may be accompanied by direct mail or press advertising. Direct marketing refers to the marketing operations where company sale is made directly to the purchaser without any conventional distributors being involved. Direct marketing involve a number of different methods which can be used in order to reach, communicate, interest and encourage consumers to buy. The methods are: direct response advertisements direct mail and mail drops personal (direct) selling Catalogue selling (McDonald, Christopher, 2003). Mail drops on the other hand are where the delivery of promotional literature to potential customers is undertaken by agents. It may involve posting through letter boxes, handing promotion literature out in the streets, or even placing literature under the windscreen wipers of cars. It can help a company reach a widely dispersed target market, present its message in a very personalized way addressing letters directly to potential buyers (Stone, 2001). Advertisements will also be placed in the Press, on TV and radio and consumers will be encouraged to order directly by telephoning or writing to the supplier of the goods or by filling in a coupon which may be incorporated in a Press advertisement. 'Off-the-page' purchasing of this nature relies on impulse, and there is a need to present an attractive proposition. The advertisement used must be informative enough to enable Staples existing customers to make a decision to purchase. Alternatively the advert may invite the potential customer to write in or phone for a catalogue or leaflet listing the full range of services. The use of demographic descriptors can be helpful in identifying commonalities. The Choice of Press issues should be based on readership, primarily professional and business journals. It refers to the total number of people who probably will read the publication. For example professional and technical publications are often read by people other than the purchaser at the purchaser's place of work. Sunday newspapers and colour supplements are invariably passed around the family for reading. Therefore, readership figures may be several times larger than circulation figures and help to tell us how many people may read the publication. The readership profiles usually indicate the demographic characteristics of the readership, such as age, sex, and income. Internet advertising has become the most popular one because it's major advantage in that it is featured at the location where many of the final decisions and actual purchases are made. Techniques used here include: temporary price reductions; extra value offers, including offers relating to future purchase; premium offers (incentives), including free mail-in premiums, self-liquidating premiums and banded free gifts (relevant for electronic services). Staples can develop an online community. Internet-based catalogs can be updated immediately to reflect changes in pricing or product availability. Online catalogs can also provide more thorough information than conventional catalogs. Advertisements will be placed on sites and take the form of banner advertisements. The power of banner advertisements is that they can be targeted at a particular audience. Staples should pay for banner advertisements for two main reasons: (a) in the hope that the customer will click on the advertisement and then will be exposed to more detailed brand information on the company's website, (b) all visitors to a page will see an advertisement, either noting it consciously or viewing it subconsciously (Lee, 2000). This technique can be used in West European countries where Internet purchase becomes common. E-mail-based advertising is similar to direct-mail advertising in that a firm uses a database of addresses to send messages directly to the people in the database. There are two key differences. First, the cost of e-mail marketing is significantly lower than comparable postage rates. Second, the level of customization in e-mail advertisements tends to be much greater. Using these techniques, Staples should take into account cultural differences of the countries. It means that, in contrast to the US- based companies, media has a different impact on the viewer. In some countries, Internet facilities are limited, so the response from this technique can be much lower. On the other hand, some foreign companies do not use to purchase through Internet (banner advertising and e-mail sales will not work in these countries). For this reason, the main focus should be made on local press, direct sales and radio. Advantages of radio include: national and local advertising is possible; radio advertising is inexpensive; but it has an advantage that there is no visual effect, the message cannot be physically passed or reread. (Evans et al, 2004). b. The new risks for Staples might arise due to the new global focus. Most firms will be reluctant to enter countries that have high political risks unless the potential returns are high or when countries with high political risk are providers of raw material that are in short supply. Thus, inflation rates, balance of payments, exchange rate stability, government budgets and the record of growth will be considered to evaluate the prospects for economic instability or crisis. Environmental scanning, strategy development and consistent market and global industry monitoring are the main steps for successful operation oversees for Staples (Crawford, Benedetto, 2003). For one thing, cost leadership can be imitated by competitors, especially when technology changes. Differentiation can also be imitated by competition, especially when the basis for differentiation becomes less important to buyers. For example, if Staples follows a differentiation strategy it must ensure that the higher price it charges for its higher quality is not priced too far above the competition or else customers will not see the extra quality as worth the extra cost. Focusers may be able to achieve better differentiation or lower cost in market segments, but they may also lose to broadly targeted competitors when the segment's uniqueness fades or demand disappears (Keegan, Green, 2003). Most firms will be reluctant to enter countries that have high political risks unless the potential returns are high or when countries with high political risk are providers of raw material that are in short supply. Failure to carry out such investigations can lead to costly mistakes as was discovered by many of the firms that entered the Russian and Korean markets in the belief that the fall of communism and the introduction of markets had led to political and legal conditions that were similar to those in developed countries. Another risk associated with purchasing facilities of a particular market. It means that penetration into low developed countries will fail if the price level is too high for this target market. Also, some risks may arise if competition and market barriers are high. c. The main resources and materials Staples will need fall into three groups. The first one is customer database, the second is information about the level of prices and market size, competitors and the third group include advertising materials for a particulate country. The third group is important because there is a great difference between US-based, East European and Asian companies. Staples should have information about existing products and services on the market and their price level. For this purpose secondary data collection method should be used. The secondary data collection is not so expensive as the primary data collection (Pagell, Halprin, 1998). Staple will need printed materials such as brochures, catalogues and product samples developed according to cultural differences and consumer preferences. All too often in domestic transactions managers have a tendency to take culture for granted and not explicitly incorporate its effects into their decisions. When dealing with the foreign markets, even those whose cultural distance from ours is not great, this should not be done. Cultural context is important for understanding differences among cultures in their reactions to communication and behavior. For customers list (database) statistical modelling can be used to isolate the key drivers and to identify customer groups. There are two types of data: primary and secondary data collection. The following methods can be used to collect primary data: individual interview, telephone interview, e-mails. Secondary data are generally used when: the time, manpower and resources necessary for its own survey are not available (and, of course, the relevant secondary data exists in a usable form), or it already exists and provides most, if not all, of the information required. The external secondary data sources are: the results of a survey undertaken by another company, analysis of the salary and occupation of its customers; a commercially produced goods survey giving popularity ratings and buying intentions, might be used by a garage chain to estimate stock levels. The most important external secondary data sources are official statistics. Postal and on-line questionnaires are useful where there is an extreme geographical dispersion of the respondents, as the cost and time of travelling to respondents is saved and initial responses may be obtained faster (Pagell, Halprin, 1998). A few sources of primary data from consumer and user markets include: consumers, retailers, wholesalers, factors, brokers, suppliers of goods and services and manufacturers, extractors, processors, voters or donators and beneficiaries in the case of charities or members of trade unions. One method of obtaining primary data is through field surveys undertaken by the company. This involves the company directly undertaking a planned marketing research study on interviewees/respondents. It is possible to conclude that going global, Staples should take into consideration theories, methods and models to analyze international business perspectives, opportunities and possible threats. Therefore, the use of information gathered needs to be treated with great sensitivity and considered in the light of cultural norms and acceptance. It is important because global product structure is often considered as a separate marketing context requiring adaptations of the product, its price and the way it is promoted to account for differences in diverse countries. References 1. Crawford C. Merle and Di Benedetto C. Anthony. (2003). New Products Management. Irwin-McGraw Hill. 7th edition, 2. Evans, Martin, O'Malley, L., and Patterson, M., (2004). Exploring Direct & Customer Relationship Marketing, 2nd edition, London: Thomson. 3. Keegan, W. J. and Green, M. S. (2003). Global Marketing 3nd edn. UpperSaddle River, NJ: Prentice-Hall. 4. Lee, O. (2001). Internet Marketing Research: Theory and Practice Idea Group Publishing. 5. McDonald M., Christopher M. (2003). Marketing: A complete Guide. Palgrave Macmillan. 6. Pagell, R. A., & Halprin, M. (Eds.). (1998). International business information: How to find it, how to use it. Phoenix, AZ: Oryx 7. Stone B. Jacobs R. (2001). Successful Direct Marketing Methods, Seventh Edition. McGraw-Hill. Read More