Enhancing Competitiveness through Strategic Marketing - Term Paper Example

Enhancing Competitiveness Through Strategic Marketing Introduction To go into business, an organization with a product or product line to sell starts by undertaking the mandatory market research. This is the ABC of strategic marketing, which places utmost importance on market research as the primary basis for identifying the particular market to which the products will be offered, what products fit the needs of which market, and what sales methods are feasible for that type of market. A profile of the target market is then drawn to mark its demographics, size and buying patterns. From there, the marketing strategy as employed by most businesses today goes into specifics. The organization evaluates its strengths and weaknesses to determine how much time, energy and cost will it spend on the marketing effort. This decision is crucial because the competitiveness and viability of an organization are imperiled if it expends so much manpower and money on a marketing drive that warrants less. In the same vein, the organization will accomplish nothing if it spends less for the marketing of a product that requires more. The specific considerations include the newness or uniqueness of the product. If the product represents a market innovation or it is different from other products available in the target market, such a product has a built-in advantage, according to the so-called Porter generic strategy as posited by market analyst Michael Porter. Central to strategic marketing is the research data on how customers buy, what they buy, where they buy, how they buy. This elaborates the principle of the 4 P's in marketing which are product, price, place and promotion. I. Evaluation In the target market, the organization decides if it wants to be the industry leader, follower, challenger or niche-maker. Does it want to dominate this market or simply snag a share in it The scope and coverage of the market strategy depend on these choices based on conditions reflected in the market research. The company also determines if it wants to fast-track its sales effort by using aggressive methods or warfare-based tactics, which refer to defensive or offensive, flanking or guerrilla maneuvers. Before the actual market launch, a company prepares for the big event with its mind already made up on the mix of methods it will use. The marketing, promotion and advertising methods are already specified, along with the product packaging and physical distribution. Cost projections for sales and related activities are in place, while prices have been determined based on the end-user's perspective. Also, the company must have determined the appropriate pricing and credit schemes as to where introductory discounts would be offered. Equally important is the availability of plans to deal with competitors and some fallback measures in case the sales target is not reached. Cost projections should be developed on the short-term, medium-term and long-term basis and drawn at least one year ahead of the product launch for good measure. This should be updated monthly at first and then quarterly or annually afterwards. For each target market, in the case of organizations coming out with a product line, the estimates should cover sales volume, selling prices and total sales at least four years into the future. In selecting the best methods for attracting buyer's interest in a product, a company in today's fast-changing world would do well to remember that business and consumer trends are always in a flux. Marketing strategies in the fashion industry, for example, are often thrown off balance when hemlines go down without a moment's notice today and then go up as just as fast tomorrow. Thus, it makes sense for a marketing strategy to be drawn up well in advance of the product launch and to be updated as often as possible. It also has to plan for the future. For companies going up against strong competition, the aggressive and warfare-based strategies are worth considering. Let us say your product is intended for a market dominated for many years by a certain brand. The best method here is the flanking maneuver which requires that you develop several products for the same market to sort of crowd out the "enemy." This should be accompanied by a hyped promotion and advertising campaign for all the products until it confuses the market. As for prices, yours must be flexible and hewed closely on changing market conditions. II. Communications Strategy The use of communications as an effective tool for strategic marketing appears to have failed the Compass Group of UK and Ireland which used to be a big name in the catering service industry until competitors begun to sprout left and right. For one thing, there is its name which connotes instruments used in professions not even remotely related to food service. Also, there are at least 10 Compass Group subsidiaries engaged in exactly the same industry, all sporting different names, which situation tends to confuse consumers. These include Eurest, Baxter & Platt, Everson Hewett, Quadrant, Restaurant Associates, Leith's & Roux, Scolarest and Medirest. When started by Jack Bateman in 1941, the Compass Group operated canteens to support the British war effort. It flourished and went on to become an FTSE 100 company in 1998, which is equivalent to the Fortune 100 list in the US. By 2000, it became the UK market leader in food service and hospitality, after which the downslide begun. One of the probable causes of the Compass Group's woes is that food catering is not a capital-intensive industry such that just about anyone with a little cash and some utensils can get a piece of the action. Now, Compass operates staff restaurants, coffee shops, caf bars, food courts, corporate dining and hotel support services that are offered by a slew of other UK establishments. Compass has the advantage of name and reputation to reassert its market dominance in the food service industry. The company should mount a tri-media advertising campaign that exploits this advantage to the hilt by using it as tagline. Communication within the various Compass Group outlets must also be improved since any failure in such communication could result in a service breakdown. III The PZB Model According to the PZB model developed by Parasuraman, Zeithaml and Berry, there is a gap in the customers' perception and expectation of a product or service quality that marketing strategies should always address. Whenever such a gap is noted in the research, marketers should pay attention to whether the situation is critical, thus it needs immediate action and investment. Other problems may be just set aside for future action or watched for possible deterioration. But as a traditional tool of market research, this theory may no longer be effective as main basis for a marketing strategy. It has been pointed out that in the hurly-burly of living, consumers are not even aware of their consumption patterns, how they perceive or expect a product/service. They have to worry about many other things - their families, their moods, the weather, pollution, terrorists. Thus, the customers can be easily led in one direction or another by a repetitive and effective promotional campaign. Marriott Hotels & Resorts can take a cue from this to strengthen its market position in the hotel and resort industry. Like the Compass Group, Marriott can use its established name to keep one step ahead of its growing number of competitors. A name rich in history is a marketing strategy that can influence customers' perspective and purchasing behavior. The Marriott group can promote itself by invoking its bigness and presence in 70 countries and territories - 2,800 lodging properties worldwide. These include 699 Marriott Courtyards, 496 Residence Inns and historical sites named as Renaissance Hotels & Resorts. Helping preserve cultural and historical landmarks in UK is part of Marriott's mission of "service to associates, customers and community." . All of the Marriott hotels and resorts are economy-class facilities equipped with fitness centers, gift shops, swimming pools, concierge levels, business centers, meeting facilities and high-speed Internet access. Conclusion If a company comes up with a product that is essentially the same with that of the competition, no amount of strategy can prevent a market flop. It is easier to work with a known product than a newfangled one but a unique and innovative product always draws curiosity and interest and strategic marketing must use this to advantage. On the 4 P's, many marketing experts are beginning to find that the theory does not often work. Prices have to be set based on production cost and what the competition offers while promotional budgets are traditionally small. As for the place, it is not really important whether you launch the product in cities or provinces, and market research can be upset by unexpected developments. Read More