Marketing Management - MBA and SBU - Essay Example

?Category Marketing Strategy 1. As a newly minted MBA, you have been hired by the Rocky Mountain Bicycle Company to develop a marketing strategyfor a proposed new bicycle. (1) What are the major decision areas that need to be considered? (2) Do you believe that the bicycle market is suitable for segmentation? (3) Is marketing strategy a static or dynamic process? Please explain. The marketing strategy for the Rocky Mountain Bicycle Company should encompass entire business philosophy that involves decisions related to production of bicycles, their sales, market segmentation and customer relationship management. Production orientation should consider building bicycles that most people prefer. This should involve good quality and durable bicycles, sports bicycles, stylish ones etc. Bicycles are mostly used by young people, children and sports people. Hence, types of bicycles should be based on what these groups would prefer. Within this group, segmentation would be of great benefit because we can cater to different preferences based on demographics, benefits, psychographic and behavior or usage groups. Marketing strategy should be a dynamic process because of changing nature of customer needs and expectations, competitive external forces, environmental factors that impact marketing and business, and other economic, sociocultural and psyhocographic factors. Static marketing process will not help companies to incorporate innovation, changing customer needs and external factors that impact business. 1.3. Your company is contemplating the choice between a mass marketing and a target marketing approach. (1) Explain the differences between the two approaches and methods typically utilized to segments markets. (2) Discuss the advantages and disadvantages of target marketing. Mass marketing involves considering the entire market as one unit and ignoring the differential preferences and differences, whereas target marketing considers differences in customers’ choices and requirements. These include various mixes of product, place, promotion and price. The four strategies in target marketing include mass marketing, niche, micro marketing and individual focus. Market segmentation is based on demographics, geography, psychographic nature, benefits sought markets, situations, and behavior/usage types. Target marketing helps in gaining better understanding of potential and actual consumers, and also potential demand. It also helps in identifying competing products in specific target groups. Target marketing increases sales potential, which will further help in assessing product position and strategic planning. However, target marketing involves higher marketing costs and could lead to requirement of numerous varieties of products which will eventually cause increased costs and other challenges. Target marketing requires immense research and information, which again is time consuming and expensive. Category 2: Strategic & Marketing Planning 2.2. Crocs, best known for its unusual assortment of footwear, is engaging in its first strategic planning exercise. The company currently utilizes 6 strategic business units (SBUs) for planning purposes. The company has heard of portfolio models such as the BCG Matrix but is unclear on how to proceed. Please explain the (1) overall purpose and (2) inner workings of the BCG Matrix. (3) Ideally, what would be the ideal mix of SBUs as described by the BCG Matirx for Crocs? Please explain. The Boston Consulting Group (BCG) matrix is a strategic planning tool that is used for evaluating the relative performance of businesses of a diversified organization. This tool assists in assessing a company’s performance in terms of its products and/or services and its market share. According to this concept, businesses/product lines are categorized into question marks, stars, cash cows, and dogs. Cash cows are those that yield high return on investments, which is greater than the market growth rate and hence generate most of the cash. The Stars yield high profits in the market and also have large growth rate. These products also consume large amounts of investment. The products in question marks’ category are those that are relatively new and occupy low market share. These are usually the innovative products that companies launch to attract more customers or to create a market niche. These products also require high investments. If these products fail to capture the market and/or create profits as expected, they become ‘dogs,’ which have low growth and market share. The investment into such products gets trapped and hence must be divested. An ideal mix of the SBUs as described by BCG matrix for Crocs should have those product lines that maintain its current position in the market. Secondly, Crocs should come up with their unique selling products that can create niche in the market. Crocs should identify products that are least selling and should stop their production. Investments from these products must be diverted to their successful USPs and/or regular selling products in order to improve their profits. 2.3 One of marketing main purposes is to deliver “value” or “benefits” to the customer. (1) Discuss the concept of “value.” (2) How is value or benefits delivered to customers differently for services compared to goods? Please explain. The concept of ‘value’ refers to the importance given to products and services by customers. Marketing function can highlight the superiority of the product or service and its use, which can enhance value of that specific product/service in consumer’s viewpoint. Value is also enhanced by providing the best quality product/service at reasonable price. Diversification of products/services also enhances value and attracts more consumers. Value can be increased through branding and advertising of products/services. In total, customer value includes product value, service value, personnel value and image value. The main difference between service value and product value is that service value is covered in the total experience of the customer that ultimately results in satisfaction/dissatisfaction. Consumer satisfaction is achieved when the services offered meet their expectations. Customer satisfaction is also dependent upon one major factor, employee satisfaction. Employee satisfaction is dependent upon internal service quality defined by nature of job, rewards and recognition, technology and tools. These have direct bearing on employee loyalty, productivity, and retention. Therefore, value for services is delivered through a variety of channels that include employee, policies and procedures, technology, and of course products/services. Category 3: Buyer Behavior 3.1. You have just concluded a set of focus group interviews for a local BMW dealership. Focus group members were asked to complete a consumer decision process model relating to their car purchase decisions. From a managerial perspective, what can be learned from the prepuchase stages of the consumer decision process model? Based on the focus group interviews for a local BMW dealership, the prepurchase stages of the consumer decision process model shows that the customer buying decision process is influenced by various factors. For instance, customers identify the need to buy a BMW mostly as an extended decision. Secondly, their learning about the product plays a major role in choosing one. Most of the customers are motivated towards this product based on their learning and/or prior experience. Sometimes, individual values, self-concept and lifestyle also cause them to go for BMW products. However, most customers evaluate alternative options by referring to their friends and family. Technological capabilities that aid in accessing information related to BMW products, alternative purchase options and information also play a major role in decision making process. Consumers’ mood, physical surroundings, and timing also play a role in their decision making. For instance, consumers seemed extremely satisfied with their prior experience and had also obtained similar feedback from their peer groups before they decided to purchase BMW product. 3.3 In marketing’s early days, consumer groups were highly suspicious of marketing firms. These groups believed that marketing firms could brainwash customers and force customer to purchase products they did not need or want. Based on your knowledge of the influences on the consumer decision process, do you believe that it would be easy to manipulate the purchase behavior of specific individuals? Customer buying decision process is more rational and based on his/her requirement, ability, learning, experience and available options. Hence, marketing alone cannot influence their buying decision. Based on our focus group discussion at BMW, it is clear that every consumer buying decision is based on the SOI model (sense organize and interpret), which forms the basis for perception about a specific product/service. Individuals have different motivation or attachment towards well established products/brands. Hence, image forms a major decisive factor; here, marketing plays a significant role influencing customer buying decision process. Other decisive factors include cost, capability, product features, family and household, culture, etc. Hence, it can be said that marketing alone cannot influence customer buying process; however marketing can facilitate customer buying by highlighting value proposition attached to the products/services. Category 4: Marketing Annual Editions (Readings) & Presentation 4.1. According to the readings, the luxury market has changed. (1) How and why has the luxury market changed? (2) As a brand manager of a luxury product, how can you more effectively compete in today’s market place? (Use the fundamental components of marketing strategy and the impact of environmental forces to shape your answers to this question). The luxury market has changed because of various environmental forces. The political and legal forces are levying greater taxes and regulations on import/export and other business procedures. Secondly, competition due to globalization and improved technology has resulted in greater demand and hence increased prices of raw materials as well as finished goods. Technological forces have provided way to improved communication, movement and sophistication of procedures. This has also resulted in requirement of advanced skills and competent workforce, thereby increasing the labor costs. Economic forces are guarded by political, legal, and globalization. Globalization has also increased cultural mix and hence customer preferences have also become more mixed. In order to compete effectively in today’s luxury marketplace, it is important to look at marketing as a business philosophy and incorporate marketing at strategic level with a customer focus, which can bring in coordinated marketing and achieve long-term customer focus. Read More