Lockheed Martin Aeronautics Companys Marketing Practices and Strategies - Term Paper Example

Lockheed Martin Aeronautics Company’s Marketing Practices and Strategies This study focuses on Lockheed Martin Aeronautics Company. The study seeks to understand how the company applies marketing strategies and practices in its operations. It entails the introduction of the company, its brief history, and areas of operations. The study analyses various strategies that the company applies in its marketing, evaluating how each strategy effectively works for the company and how it has enabled the company overcome competition in the market segment it operates. The study also samples some of the products that the company provides for its customers, seeking t understand how it delivers value to the customers through the provision of such products. How the company applies quantitative and qualitative research in its bid to provide its customers with value is also a subject of discussion under this study. Through an analysis of marketing practices and strategies applied by the company, the study indicates how the company has emerged as the largest defense contractor. The study focuses on all the segments of the market that the company serves, giving examples of products and services that the company provides to the respective market segment. Through this study, an understanding as to the source components that makes up the annual revenues of the company is created, with a special emphasis on the role of contracting as a marketing strategy and practice in subscribing to the revenues of the company. A conclusion and recommendation are also given. Introduction This is a company based in USA, formed by a merger of two companies, Lockheed and Martin Marietta in 1995. The company ranks as the world’s largest defense contractor, though it offers a range of product and services in the market. The company has diversified its operations to engage in various market segments, among them aerospace, defense, advanced technology and security (Carl, 2010).Lockheed Martin Aeronautics Company Palmdale, is the location where the company’s Advanced Development Programs division is based. This is informally referred to as Skunk works (John, 2009). The company is involved in the research, design, development, and manufacture of products for use in the fields of defense, homeland security, information technology, and space (Norris, 2011). On top of products provision, the company also provides services in the fields of engineering, manufacturing, technical, and logistics. Lockheed Martin Aeronautics Company has suitable marketing strategies. Having been able to diversify its operation in many segments of the USA economy, the marketing practices adopted by the company proves to be successful. The significance of this research topic is to indicate how customers perceive value and how the perceived value is delivered by this company to the customers. Through an assessment of various products and services offered by the company to its customers and how the company ensures value for its customers, the topic serves to create knowledge on suitable organizational marketing strategies and practices that can be applied to enhance the success of an organization, in the face of competition (Carl, 2010). There are various marketing practices and strategies that are a characteristic of this company. Diversification is one of the strategies adopted by the company to ensure it has successfully overcome competition in the market segments that the company operates (John, 2008). The company has diversified its operation in four major segments of the It industry. The segments include Aeronautics, where the company designs, develops, and manufactures military aircrafts including the combat and air mobility aircraft (John, 2009). Under this segment, the products that the company provides include the popular F-35 Lighting II joint strike fighter, F-16 Fighting Falcon multi-role fighter and the C-130 tactical air fighter (Roderick, 2011). The company also engages in the electronic systems segment, where it produces surface ship and combat submarines among other services desirable in the military electronic systems. Diversification as a marketing strategy for the company has seen it engage in the space systems, where the company provides satellites, missile defense systems, and space transportation systems. The company’s indulgence in the information systems segment of the IT industry is yet another of its diversification strategy, where it offers management services, advanced technology, and information technology solutions (Carl, 2010). Such a strategy has seen the company become successful and be in a position to overcome its competitors, in that it has various sources of revenues generated through the sale of its diversified products. This has seen the company emerge as the largest defense contractor in the USA, providing virtually all the military products needed by the department of defense. Partnership is another marketing strategy that has been adopted by the company to ensure that it remains competitive in the IT market segments that it operates (John, 2009). The company has partnered with companies like the Boeing company to produce aircrafts such as the F-22 Raptor. Such partnership ensures that the company is in a position to launch into the market an advanced technology product, which it cannot provide on its own due to various limitations. Such partnership serves to enable the company deliver value and meet its customer’s demand, even when the company is not solely in a position to do so (Norris, 2011). With the understanding that customer needs has to be met, if the company has to remain competitive in the market, such a strategy ensures that the company never disappoints its customers (John, 2008). Joint venture is such other strategy that ensures the company succeeds in the market. The company has ventured jointly with the Boeing company, creating a venture called the United Space Alliance, which conducts day to day operational management of the shuttle fleet (Wayne, 2008). The company has also entered in joint venture with Russian companies, through which it markets commercial atlas and proton launch services (Carl, 2010). Joint venture as a marketing strategy serves t ensure that the company’s operations are launched and distributed the world over, where it cannot afford to distribute its products and services on its own. This strategy serves to help the company conquer wider markets and thus ensure it effectively competes in the market segments where it operates. The company applies supplier collaboration as another of its marketing strategies and practices. To enhance customer collaboration, the company has provided a single point of access to all its suppliers. Since the suppliers of the company ranges from larger IT firms to small firms in the industry with specialized products and services, the company has integrated and customized the access to its suppliers through a portal based environment (John, 2008).The suppliers are administered through this single portal which makes them appear within the same system. Through such collaborations, the suppliers can access the internal systems of the company, ensuring that physical supply of materials to the company are not delayed, since the suppliers can assess the remaining stocks of materials and decide on when to supply the next bunch. This strategy serves to ensure that the company saves greatly on procurement procedures and thus makes the whole system efficient and effective. The strategy also serves to eliminate any delays associated with the supply of materials. This system has seen some suppliers manage to supply the company even 400 times within a month, based on the assessed need of the company (Lawrence, 2010). Therefore, the company’s use of the supplier collaboration strategy as part of its marketing strategies and practices has effectively smoothed the supply chain of the company. This efficiency has been enjoyed by both the suppliers and the company, serving to strengthen the relationship between the company and its suppliers and thus affording the company an avenue to compete effectively with the others in the same market segment. Contracting has been applied by the company as a marketing strategy and practice. The company has specialized in securing big contracts, which forms the substantial part of its revenues. Especially, the company has effectively established contract for the supply of products and services to the USA government, foreign government and to a lesser extent other commercial contracts (Carl, 2010). In the year 2009, the contracts for supply of products to the USA government, mainly the department of defense accounted for 38.4 billion US dollars, which formed 85% of the total revenues earned by the company in that year. The contract for supply of products and services to foreign governments amounted to 5.8 billion US dollars, which accounted for 13% of the total annual revenue earned by the company in that year. The contracts to supply other commercial entities accounted for 0.9 billion US dollars, which formed a 2% of the total annual income (John, 2008). From the data provided, it clearly indicates that the whole 100% of the total income earned by the company was from contracts. This shows that the company has effectively applied contracting as a marketing strategy and practice, which has been very effective. This strategy has enabled the company compete with others operating in the same market segments, in that it ensures that the company has already secured a market that other competitors has no access to. This marketing strategy and practice has served to make the company emerge as the largest contractor in the US defense. The company has successfully applied qualitative and quantitative research, in the course of its operation, to discover customer needs and effectively meet them. Through such research, the company has effectively designed products that have served the customer’s needs effectively. With the defense requiring an effective aircraft for air combat, the company undertook a research and came up with the F-35 Lighting II aircraft, for air defense and ground attack (Richard, 2009). The relationship between quantitative and qualitative research is that the quality and the quantity of the products provided should match customer’s requirements. Thus, the company designed the aircraft in three variants, all using 80% of similar materials, but depicting different qualities as desired for ground and air combat. This resulted to three models of the aircraft, F-35A designed for conventional takeoff and landing, F-35B designed for short takeoffs and F-35C, which is carrier based (Carl, 2010). All this models were designed to deliver customer value satisfactorily. Through research and discovery of a need for air superiority fighter, the company designed F-22 Raptor fighter for US department of defense. The fighter has also been added more qualities that enable it perform in ground attack and electronic warfare (John, 2008). This has effectively delivered value to customer, in that it has served the needs of the department of defense for a multipurpose fighter. P-3 Orion is yet another product that was developed by the company to deliver value to its customer. This is an anti-submarine and maritime surveillance craft, developed to serve the needs of the US navy (John, 2009). The aircraft is designed in a way to detect magnetically a submarine from a distance, a fact that has enhanced its use for maritime patrol and anti-surface warfare (Wayne, 2008). This product has been effective in meeting the need of the US Navy through the provision of equipment through which other submarines can be detected and fought under the waters. Therefore, the company’s products have been specifically designed to meet customer requirements and specifications and thus deliver value to the customers. Conclusion Lockheed Martin Aeronautics Company is a company that has effectively applied its market strategies and practices to deliver value to their customers. This has been enhanced through the company’s conduction of quantitative and qualitative research, that has enabled it integrate all the customer requirements and preferences in their product design and development. This way, the company has effectively delivered value to its customer, a fact that has enabled it rise to be the largest defense contractor in the US. Through customer needs focus, the company have also been able to secure contracts from foreign governments that has formed a substantial percentage of its annual revenue. Through strategies such as supplier collaboration and joint venture, the company has been able to disseminate its operations to other regions outside of the US. Diversification has played a major role in enhancing the competitiveness of the company in the market segment it serves. Recommendations As a recommendation, the company should apply differentiation as a part of its marketing strategies and practices, in order to focus on serving a single market segment, as opposed to the four it currently serves. This will enhance its specialization and ability to deliver value to its customers. Works Cited Carl, P. (July 14, 2010). British aerospace firm buys Sanders. The Union Leader. John, A. (2008). Marketing Principles and the Future of Preventive Health Care. The Milbank Memorial Fund Quarterly. Health and Society. John, M. (April 23, 2009). Lockheed-Martin Loral Merger May Mean a Loss of Business; McDonnell Douglas Threatens to Cancel Billions in Contracts. The Washington Post. Lawrence, B. (2010). Ethical Problems of Marketing Researchers. Journal of Marketing Research. Norris, F. (August 31, 2011). A merger of equals, with Martin Marietta the most equal. The New York Times. Richard, D. (2009). Methodology to Study Firms Strategies and Performance over Time. Journal of Marketing Theory and Practice. Roderick J. (2011). Hypotheses in Marketing Science: Literature Review and Publication Audit .Marketing Letters. Wayne, L. (July 17, 2008). Lockheed cancels Northrop merger, citing U.S. stand. The New York Times. Read More