Balanced Scorecard Basics - Essay Example

?Marketing and Strategy Assignment Instructions: Survival of the Fittest? Table of Contents Marketing and Strategy Assignment Instructions Survival of the Fittest? 1 Table of Contents 2 Introduction 3 Analysis 3 Conclusion 9 References 10 Introduction The age of consumerism and globalisation has led to considerable pressure on business organizations to segregate their product and service offering from the rest of its competitors. Business organizations are trying out various tactics like predatory pricing as well as innovations in marketing communications and overall product mix in order to segregate their products and services from rest of its competitors. This has led to organizations undertaking innovative means to showcase segregation in their product and services in order to attract customers and beat their rivals (Porter, 1998, p.169). Companies are spending billions towards research and development in order to create innovations in their product lines. Firms like Apple are generating their core competence in the market based on innovations and research and development (Ireland, Hitt, & Hoskisson, 2011, p.82). The increased competition in the market has also led to marketers spending huge amounts towards improving their positioning and brand image in an attempt to create a distinction between the products and services offered by the competitors in the market (Davis, 2009, p.148). The present study would analyse the marketing strategies adopted by various organizations in an attempt to create segregation and generate competitive advantage in the market. The study would specifically focus upon marketing strategies with real life examples in the industry so as to help generate competitive advantage for business organizations. Analysis The role of marketers in the present business is essentially to analyse the needs and wants of the customers and design product mix in a manner that tends to satisfy the unfulfilled needs of consumers. Marketers are spending billions on conducting marketing research in order to analyse the demands of the consumers and design an optimum product mix that can be used to generate competitive advantage in the market. Marketing research can help marketers and strategists in determining the gaps in the present level of product or service offering and the demands of the consumers. These gaps can be consequently help in generating a product mix that would help enhance the positioning of the organization. Market research can also help companies find the perceptions of their brands among the members of the target market audience. Strategists can then take up policies that can help in improving their image through the feedbacks gathered from the research (Duboff & Spaeth, 2000, p.106-108). One such example can be found in the case of South Central Bell Company that was continuously losing its market share. Using market intelligence tools and conducting market research, the company was able to able to identify the reason behind the debacle and take up corrective measures that helped it to again regain its lost position in the market (Hair, Bush & Ortinau, 2007, p.116). Pricing is another critical strategic aspect that can be used to generate market advantage in business. Companies are trying to generate organizational excellence by using technological innovations like Total Quality Management, Kaizen and Six Sigma to ensure minimal operational costs. Examples of this form can be traced in the business strategies of companies like Toyota that has generated competitive advantage based on Just in Time approach (Imai, 1997, pp.4-6). Predatory pricing is one strategy that is very commonly used by marketers to gain market share and eliminate competitors. This strategy involves selling products at lowest rates that helps them capture a large share of the market (Greene, American Bar Association & Section of Antitrust Law, 1996, p.55-56). However critiques have also slammed the benefits of using this strategy as they believe that predatory pricing strategy leads to unfair competitive practices in the market and generates unhealthy competition as firms after eliminating their competitors go about to increase the prices and also gain monopoly in the market that is against business ethics (Jones & Sufrin, 2007, p.462). Companies like Wal-Mart use a cost leadership strategy to generate competitive advantage in the market. The company’s score competitive edge arises out of its famous EDLP (Every Day Low Price) strategy under which it provides products at very low prices. At the heart of this strategy lies an efficient inventory management that helps bring about cost advantages in the form of reduced inventory carrying costs. The company has effectively used innovations and took the help of technology to initiate its EDI (Electronic Data Interchange) program that has helped eliminate stock outs and has generated greater confidence among the customers. This apart the company has also been able to provide more value additions to the service offering that has helped make it the largest retailer across the globe (Quelch, 2007, p.189-190). Branding is one critical area that can be used by marketers to remain viable in the highly competitive business environment. A brand helps in creating a distinct image for a product or service in the minds of the target market audience. Consumer needs are constantly changing with the demands getting more innovative in nature. The aspect of product life cycle becomes very important in this regard with products getting quickly into their stage of maturity and decline (Pepe & Nova Southeastern University, 2008, p.20-22). Repositioning is an emerging trend of strategy formulation that has helped in changing perceptions about products and creating fresh interests in the minds of the consumers. An example in this regard can be found in the case of Dove soaps. Dove caters to the soap industry that is essentially in the maturity stage. However the company started an innovative strategy of repositioning and projecting the soap as a modified form of milk based moisturiser that can also be used as soap. This led to the generation of an entirely new but related product category. Since the approach was quite innovative customers began to segregate Dove from other soap brands and consequently the product was pushed back to the growth phase. This not only helped the company to generate a renewed interest in the product but also helped in creating a niche for itself in the market (Kumar, 2009, p.131). Another very important trend observed in recent times involves use of integrated marketing communications and public relations to generate consumer interest in products and services. The rise in internet usage and advent of social networking has increased the importance of online marketing communications. E-commerce has also developed as a major channel for sales with most of the retail organizations having a web portal where customers can directly purchase goods from the convenience of their homes and get goods delivered at their doorsteps. The development of the bricks and clicks model of business has led to considerable opportunities for marketers to use the huge opportunities offered by online social networking sites to reach out o a huge audience. Organizations like Amazon and eBay have derived their entire business model based on web portals. The internet has also opened up new cists for organizations with regards to getting close to customers and understanding their needs and wants (Pinterits, 2009, p.22). One such instance can be found in the case of Sara Lee Corp which markets the famous Kiwi Shoe polish. The company used internet forums and social networking to understand the needs of the customers. The results from the survey indicated that the dip in sales volumes was largely due to the changed perceptions and a shift in demand pattern. Consumers were more attracted towards freshness of their shoes rather than polishing. The company further used internet to garner views about the consumer’s needs and wants and finally came out with a new combination that was in accordance with the consumer’s expectations. This case clearly highlights the revolution that has been created by the advent of the internet. Firms like eBay are making billions by leveraging the immense potential and reach of the internet (Lamb, Hair & McDaniel, 2011, p.470-474). The changing demands and technological advances have also led to the growth of the importance of innovations in product lines. Research has proved that innovative products are very high in demand and are likely to attain a competitive edge in the market. Companies like Apple draw their core competence on the basis of innovation. Behind a successful innovation lies a strategy of continuous research and development (Hill & Jones, 2007, p.100). Innovations help generate renewed interests among customers and are likely to create a positive impact on the customer’s frame of mind. This also helps generate an effective brand image of the company in the minds of the consumers. Innovations however need to be backed by a strong marketing communication program. This is because it is very important to convey the new innovation in a proper manner to the customers so that the innovation generates an interest among the customers. Innovations not only bring about a growth in sales volumes but also lead to an overall growth in the valuation of the company. Innovations also help in bringing about greater sustainability and helps in improving the learning curve of the organization. Some critiques have however cautioned against over spending on research and development as they believe that this may lead to financial instability for the company and generate considerable risks for the company. However a balanced and planned approach can help generate a situation in which organizations would be able to derive greater competitive edge and long term sustainability in the market by virtue of its innovative strategies (Strecker, 2009, p.70-72). In the age of increased competition one very important trend observed involves the use of Customer Relationship Management policies. This is because of the fact that in the present competitive environment it has become essential to not only attract new customers but to also retain their existing customer bases. Experts have pointed out through careful research that it is less costly to retain an existing customer than to acquire a new customer (Barlow, 2009, p.40-45). The development of customer loyalty programs is one step taken by firms in this regard. Loyalty programs provide an incentive to customers for indulging in repeat purchases. Customers are given points on every purchase that can be redeemed in form of discounts and other benefits. Other CRM initiatives include data mining customer and getting in constant touch with the customers. This is very important as it is very necessary to remain close to the customers if a company wants to know their needs and wants. Getting close to customers also helps in creating a long and cordial relationship with the customers. Most of the airline companies have introduced frequent flier benefits programs by giving bonus points every time they fly with the airline. This has not only helped generate competitive advantage but has also helped in improving the overall brand image of the organization (Brooks, 2010, p.56-58). Innovations in customer service management are yet another area that can help bring about distinction in the products and services of business organizations. After sales service includes effective customer complaint mechanisms that can help bring long lasting relationships with the customers. The example of BUPA is an illustration of how an effective grievance handling can bring about competitive advantages. The company used an effective system to help resolve claim issues in a fast manner that helped it to generate better trust and confidence among the customers (Dixon, 2005, p.145). Conclusion The analysis conducted above reveals a constant need for marketers to develop new innovations in product and service offerings in order to remain competitive in the market. In a globalised business world it is very essential for marketers to realise the importance of local culture and sentiments of the individuals. Innovative ‘glocalised’ approaches as the one followed by companies like McDonalds can help generate a better image for the organization (Culpan, 2002, p.60). Finally last but not the least there should be a system for ensuring constant monitoring and evaluation. Use of a balanced scorecard can help a firm evaluate its financial as well as non financial strategies. This can help a company keep a tab on its accomplishment of the objectives that can help take suitable actions in time (Balanced Scorecard Institute, 2011). All these strategies along with a long term planning and vision can not only improve the bottom line profitability of firms but would also help generate sustainable competitive advantage in the long term. References Balanced Scorecard Institute. (2011). Balanced Scorecard Basics. [Online]. Available at: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx. [Accessed on December 01, 2011]. Barlow, J. (2009). A Complaint Is a Gift: Recovering Customer Loyalty When Things Go Wrong: Easyread Large Edition. ReadHowYouWant.com. Brooks, R.L. (2010). The Power of Loyalty: 10 Essential Steps to Build a Successful Customer Loyalty Strategy. Entrepreneur Press. Culpan, R. (2002). Global business alliances: theory and practice. Greenwood Publishing Group. Davis, J.A. (2009). Competitive Success, How Branding Adds Value. John Wiley and Sons. Dixon, T.J. (2005). Real estate & the new economy: the impact of information and communications technology. 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