Management Strategies Used within the Rolls-Royce Marketing Division - Case Study Example

Management Case Study Name: Course: Tutor: Date: Management Case Study Executive summary This report offers a comprehensive analysis of the management strategies used within the Rolls-Royce marketing division. Rolls-Royce is an organization leading in the manufacture of engines that serve a wide range of industries. The organization has diversified its engine manufacturing to cater for industries such as marine, energy, and civil and defense aerospace industries. Effective marketing management strategies will enable the organization to enhance its position in the industries it operates. Introduction The organization has grown tremendously to have a work force of over 35,000 employees and service facilities in over 50 countries. The Rolls-Royce group has had a successful manufacturing business for over a century since it was founded back in 1906. It has undergone various corporate restructuring and currently operates as different ventures each with a specialized objective. These ventures include the Allen gears, which specialize in the manufacture of high quality gearboxes. The Rolls-Royce power is another venture that provides solutions in the energy sector. The organization has categorized its operations into four large categories, which include the civil aerospace, marine, energy, and the defense aerospace. All these segments offer solutions in their own unique market niche and different sectors of the economy (Wilson, 2007). Literature Review This review offers a comprehensive overview of the organization management policies in its marketing division using the three-circle framework. In North America, the company has several ventures that specialize in the different segments of its operations. This research paper provides an insight in the strategic plans of Rolls-Royce for their competitive advantage. Moreover, the paper evaluates the strengths, weakness, and opportunities of the corporation in US and the world at large. Through an analysis of its marketing mix, an in-depth understanding of the company’s marketing strategy will be revealed. The three circle framework. The considerations made concerning the sustainability of the organization based on their advantages over others in different market niches Rolls-Royce have several value prepositions. In area, “A”, which defines the points of difference of Rolls-Royce compared to other companies; the company has a worldwide service network for their engines. The company has developed an array of unique characteristics that govern its operations around the world. These unique characteristics set Rolls-Royce apart from the rest of the manufacturers (Kapferer, 2012). The value preposition defines the reasons why customers would prefer to buy Rolls-Royce products other than from other manufacturers. The company offers excellent after sales services. In the civil aerospace segment, the company manufactures the engines and offers services for maintenance to ensure that customers who are the airline focus on their core business. Other benefits that customers enjoy from the manufacturer include the quality and reliability of their engines. With a comparatively large area in the section, due to the overlap of the customer’s needs and the company’s offering Rolls-Royce has built sustainable advantages over their competitors (Dewar, 1998). In the area marked as “B” in the 3-circle framework, the manufacturer has several points of parity. The company has a range of advantages over their competitors. It is a straightforward solution supplier in the civil and defense aerospace engines with distinctive capabilities guaranteeing customer satisfaction. Through their effective production team, the company guarantees customer of the reliability of their engines in the different sectors they serve (Robson, 2006). In the energy sector, the company has a customer value preposition that offers core technologies that enhance the environmental performance of their products. In the aerospace segment, the company offers a one-stop solution for aerospace engines especially in defense where ranges of technologies are required. From the MH-6 helicopter engines to the C-27J engines, the manufacturer offers appropriate manufacturing and after sale services for the military equipments (Lloyd, 2008). Marketing Mix Rolls-Royce has categorized their products into four cardinal segments. The segments include marine segment, which is involved in the manufacture of ship systems, deck machinery, motion control equipments, as well as, maneuvering systems. The other segment of the company is the energy segment. This segment is involved in the mechanization of gas and oil production equipment, power generation equipments, as well as automation and control systems and equipments. In the civil aerospace segment, the corporation offers an extensive assortment of aircraft engines that can be used large and long haul planes, helicopters and corporate jets. In the defense aerospace segment, the company develops engines for combat aircraft, cargo aircraft, and helicopters. In order to complement the functionality of this entire segment, the service segment that has a wide variety of solutions, ensures that credibility and the income expansion of the company are sustained (Winer, 2000). The services segment offers solutions in the repair and maintenance of the engines developed in the other four segments. Moreover, the segment offers financial services through extension of credit to customers such as airlines expanding their fleet. This segmentation of their products helps it to attain efficiency and innovative solutions. This leads to the expansion of the parity area and points of difference area thus enhancing the company’s competitive advantage. Roll-Royce has to develop an effective marketing strategy that is geared towards revenue growth (Salinas, 2009). The second p stands for the price of the product. Rolls-Royce pricing strategy offers exclusive and top of the range quotations. The dealers through which the products are sold are assessed based on the interests they share with the customer. In civil aerospace, the pricing of engines and services is done under the consideration of the efficiency of an engine. The pricing strategy used by Rolls-Royce is the status-quo strategy. This leaves the company with enormous margins as well as maintains its reputable brand name. It is considered that long haul and efficient engines offer airlines high operation margins due to reduced operational costs. The third p stands for promotion of the product. Rolls-Royce participates in activities that enhance their communication with their existing customers and the prospective ones. Through their robust public relations and advertising strategies, the company has been able to build a reputable brand. Moreover, a mixture of personal selling exists where a direct contact of the organization with their corporate customers (Davis, 2000). The fourth p in the marketing mix stands for place. The company has manufacturing and service centers in over 50 countries in the world. This ensures that their customers get services as well as order products from their convenient locations. When customers are able to access services such as repair, maintenance as well as financial service in their locality it increases the efficiency of service delivery (Gegax, & Bolsta, 2005). The service centers and manufacturing plants are located in strategic locations across the six continents. Through partners and other ventures, the company has invested in a robust distribution network that is in direct link with customers. This minimizes the intermediaries as well as, its operational costs. According to figure 1 below, customer satisfaction can be attained through application of various strategies. Rolls-Royce applies corporate image, customer support solution, logical solution, as well as logical solutions to their customers. This leads to appropriate customer satisfaction levels (Mühlbacher, Leihs, & Dahringer, 2006). FIG 1 Customer satisfaction In the white space of the three circles framework, Rolls-Royce can identify opportunities that exist to offer additional revenue. The unmet customer needs are determined by the opportunities that exist in the manufacturing industry. Currently, there are untapped markets in both offshore and inland mobile drilling equipments. In the highly volatile regions, mobile offshore natural gas and oil wells are required. This can be attained through an integrating of their marine technologies and the existing permanent, natural gas and oil production systems. The company can also invest in the development of submarine military equipment systems. There is an astronomical demand for off shore sea military equipments. Through a combination of efforts by their defense segment and their marine equipment, the company can develop combat equipments to be used in sea. These will provide an added revenue stream to the company. Rolls-Royce has a strong relationship with various governments through their long-standing development of defense aerospace. This means that the company will not find it hard selling water combat equipments (Woodcock, Stone, & Foss, 2003). The marketing mix of Rolls-Royce has remained reserved to current aggressive trends in pricing strategy such as penetration preferring the status quo strategy. If the company changed this pricing strategy to an aggressive strategy, it would be able to attract new business thus expanding its revenues. Moreover, Rolls-Royce has over the years specialized in the four segments of energy, marine, defense and civil aerospace this has limited its expansion to other lucrative industries such as the nuclear energy systems (Kotler, 2001). However, there are stages that the new product to be developed to meet the existing need in the market. The first phase involves the expansion of a new product strategy development. This is then followed by idea generation stage. The generated idea is then subjected to rigorous screening to test its applicability. After the idea is screened, its business applicability is analyzed through a thorough business analysis of the idea implementation. This followed by the development stage, which incorporates implementation of models and samples. For rolls and Royce, the implementation stage requires intensive, capital investment since their products are complex in nature. After the development stage, the product is taken through test marketing. This is done to ascertain the existence of a market for the product before the final commercialization step, which marks the start of a new product in the market (Ashkanasy, 2008). The Marketing Management at Rolls-Royce At Rolls-Royce, the core marketing function is to ensure that the products they receive from the company meet customer needs. Rolls-Royce strives to identify customer problems first before developing products. The company has provided a range of efficient solutions in the aerospace industry, which has lately been hard hit by the rising fuel costs. Recent developments have seen the development of fuel-efficient and long haul aircraft engine. It can lift larger planes whilst causing limited and negative environmental effects than previous years. A marketing problem starts from the identification part where an organization is bound to identify a potential customer first before finding out problems that exist. There process ensures the acquisition of a product for both corporate use and private use. If the price of a product that is needed is low, the purchase will be made without much thought (Belch, 2012). Consequently, if the acquisition of the product will cost a significant sum of money then the purchase is discussed and consultations done before the purchase. Rolls-Royce marketing strategy is to be the most recommended engine manufacturer. Current customers play a critical in the expansion of company revenues because it deals with high-value products requiring expansive consultations and enquiries before purchases are made. Personal selling where prospective customers are directly contacted and provided with enormous information concerning products they might need has been used by the company effectively (Cant, 2006). Recommendations The three-circle framework identifies the growth opportunities for the company, which has not been tapped. However, the company has effectively implemented marketing strategies that have seen enhance its competitive advantage over the years. It is also necessary to identify using a different technique the value that Rolls-Royce creates and is not necessary to the economy and should be eliminated from their product list. Rolls-Royce has effectively applied the Three-circle framework to determine the strategic plans over the years. 1. Their management practices have been of enormous benefit in the, in their success. The company should research and develop their manufacturing stations to ensure that there is a continuous trend in innovations 2. Innovative solutions to customers will ensure that the Rolls-Royce becomes competitive in the coming years References Ashkanasy, N. M. (2008). Emotions, ethics, and decision-making. London: Emerald Group Publishing. Belch, G. E., & Belch, M. A. (2012). Advertising and promotion: an integrated marketing communications perspective (9th ed.). New York: McGraw-Hill/Irwin. Cant, M. C. (2006). Marketing management (5th ed.). Cape Town, South Africa: Juta. Davis, S. M. (2000). Brand asset management: driving profitable growth through your brands. San Francisco: Jossey-Bass. Dewar, J. (1998). Aero engine product development process, practice and IT. New York: Prentice Hall Gegax, T., & Bolsta, P. (2005). By the seat of your pants: the no-nonsense business management guide. Minneapolis, MN: Expert Publishing Kapferer, J. (2012). The new strategic brand management: advanced insights and strategic thinking (5th ed.). London: Kogan Page Kotler, P. (2001). A framework for marketing management. Upper Saddle River, N.J.: Prentice Hall Kotler, P., Keller, K. L., Dubois, B., & Manceau, D. (2006). Marketing management (12e éd. / [traduite et adaptée par] Delphine Manceau. ed.). Paris: Pearson Education France. Lloyd, R. I. (2008). Rolls-Royce, the growth of a firm. London: Macmillan Mühlbacher, H., Leihs, H., & Dahringer, L. (2006). International marketing: a global perspective (3rd ed.). London: Thomson Learning. Robson, G. (2006). Rolls-Royce & Bentley. Iola, Wis.: KP. Salinas, G. (2009). The international brand valuation manual: A complete overview and analysis of brand valuation techniques, methodologies and applications.. Chichester: Wiley. Wilson, J. (2007). Rolls-Royce. Shrewsbury: Axis Education Winer, R. S. (2000). Marketing management. Upper Saddle River, N.J.: Prentice Hall Woodcock, N., Stone, M., & Foss, B. (2003). The customer management scorecard: Managing CRM for profit.. London: Kogan Page. Top of Form Bottom of Form Read More