Key Challenges Facing Companies in the 21st Century - Essay Example

Marketing Using practical examples, discuss the key challenges facing companies in the twenty-first century. What actions might marketers take to ensure they continue to survive and thrive in the new connected world of marketing? Concepts in marketing have changed dramatically over the last few decades. More focus is now put on the customers, global marketing and the advances in technology. There is emphasis on creating and innovation of new and better products rather than focusing on just the competition and their marketing strategies. Marketing continues to face new challenges in the 21st century (Doole and Lowe 2012). Among these is the threat of new entrants in to the market. The ratio of new entrants continues to get bigger and as such intensifies the competition. For example in the telecommunications industry, more companies have set up shop, introducing products such as mobile phones which are affordable therefore challenging the already existing companies. This is primarily due to the advances in technology which allows more people to venture in to business easily than it was the case in the past. This means that more superior products will be developed in order to retain a competitive advantage. Therefore, increase in the financial spending to produce quality products and services and low profit margins since the prices of the products and services will be put to match the market prices at the time. Globalisation another feature of technology is a major challenge especially to local companies who are increasingly being faced by competition from multinationals in their backyard. Local companies face the risk of losing monopoly as more and better products and services are being offered by international companies who have infiltrated their market. There is an increase in middle men and counterfeit products in the market which is a major threat to the existing genuine companies. Fake and substandard products continue to flood the market at the expense of genuine products due to their low pricing. People are buying cheap products due to the high cost of living as a substitute to genuine products they are unable to afford. The rise of middle men also, who sell products and make higher profits than the producers themselves are also a major threat to companies in the 21st century. Pfizer pharmaceutical in the US has been a victim of this continued trend with several of their medicine being counterfeited. Counterfeiting is linked to organized crimes such as money laundering and is a lucrative business for the criminals involved (Doole and Lowe 2012). To counter these challenges, marketers should strive to educate the local companies for example, on the need to globalise in order to be in tandem with their competition. Strategic marketing, which includes targeting international markets through advertising, especially via social media since it is has gained a lot of popularity in this era rather than relying on just formal advertising. By proper marketing, buyers will be made aware of the genuine products and as such reduce the cartels of counterfeits. Lowering product prices to match with the current market prices is also recommended such that genuine products are affordable to everyone. 2. Are the marketing skills that drove huge growth of low cost airlines the same as those needed to address the environment challenge they currently face? Some of the marketing skills that contributed to the growth of low cost airlines could be used to address the environmental challenge the airlines are facing today. These include the contribution to global warming due to increased flights which in turn lead to emissions of harmful gases in the air. Marketing skills such as using newer planes targeting the customers will not only attract new markets since people will feel safer in the air but also have a positive impact to the environment (Hone 2005). This is because newer planes are efficient in fuel consumption, meaning they will consume less fuel as compared to old ones. The harmful gases this way are reduced therefore less global warming. Newer planes are also more efficient in fuel hedging techniques which is pivotal in saving fuel. This entails slowing down in the air and making slow landings which saves on fuel. If this marketing strategy is used by these airlines, there will be a significant reduction in the amount of carbon dioxide emitted in the environment. Letting people in on the fact that low budget airlines are more eco friendly than expensive ones will be good for the environment (Lamb 2012). This is because, low budget airlines pack more passengers on every flight as compared to expensive ones and generally have younger, more fuel efficient fleets. The less eco friendly carriers are the expensive ones since business and first class areas take more space on the plane and therefore reduce the number of passengers on board. This is an excellent marketing skill used by marketers to attract people and also has a positive impact to the environment. Marketing skills are also necessary in making people aware that there are other forms alternative energy sources which can be used to substitute kerosene used for flying. These bio fuels if effected will be useful in reducing global warming since planes are known to produce very high amounts of green as emissions in the environment (Haseman, 2013). The skills are also needed in the management of waste as airports are known to produce large amounts of waste from the cargo and flight catering and maintenance. Enlightening people on the potential dangers as a result of this could also avert tragedy especially in the environment. 3. A very common question small business people have about the pricing strategy section of the marketing plan is: how do you know what price to charge? What would your advice be to them? Determining what price to charge on a product is one of the most difficult decisions an entrepreneur is faced with. While there is no single way to come up with the best price for your products, a few guidelines can be offered to determine the right price for the products. Positioning- this entails first identifying where you are positioning your product in the market. If the products are going in to a discount store, then it is necessary to keep the prices low to match the competition or slightly below the competition. If the product is an exclusive luxury brand, then the price should be high as low ones could hurt your image (Haseman 2013). Demand curve- understand the relationship between demand and pricing. Basic market research is necessary to identify this. It would be necessary to ask perhaps using questionnaires if people are likely to buy the product using the price indicated. This will give you an idea of what people expect and are willing to pay for a product. Alternatively, involve a research company to gauge the market (Engelson 1995). Calculate the cost- the fixed and variable cost of the product or service calculation is necessary to determine whether you are going to make a profit or not. The unit cost of the product determines the lower limit of what the business might charge, and sets the profit margin at higher prices. The total unit cost of involved in producing a product is composed of the variable cost of producing each additional unit and fixed costs that are acquired despite the quantity produced. The pricing policy considers both types of costs. Environment- Pricing takes into account the competitive and legal environment in which the business is operating. From a competitive point of view, the business must consider the implications of its pricing on the pricing decisions of competitors. For example, if the price is set too low may risk a price war that may not be in the best interest of either side. Setting the price too high may attract many competitors who want to share in the profits (Engelson 1995). From a legal standpoint, a business is not free to price its products at any level it chooses. For example, there are price controls that prevent pricing a product too high. Pricing the product too low may be considered predatory pricing or "dumping" in the case of international trade. Giving a different price for different consumers may violate laws against price discrimination. Finally, colluding with competitors to fix prices at an agreed level is illegal in many countries. The business objectives must be identified in order to determine the optimal price. These include profit maximisation where an entrepreneur seeks to reap maximum profits considering the revenue costs involved and long term survival of the business. It is also important for the business to seek stabilisation therefore averting price wars and maintain a stable level of profit. 4. In 1985 the Coca-Cola Company introduced reformulated coca-cola, often referred to as “new coke”, marking the first formula change in 99 years. The company didn’t set out to create the firestorm of consumer protest that ensued; instead, the coca-cola company intended to re-energize its coca-cola brand and the cola category in its largest market, the United States. However the backlash from consumers was enormous in scale and its scope. What went wrong and why? Coca-cola was the largest beverage brand at the time in the US with the introduction of Pepsi which was gaining considerable market share. Conspiracy theorists argue that this was just but a ploy for the company to retain its market share which was under threat by Pepsi the main rival and also to reap maximum profits for the new product. The company retained its loyal customers and gained new ones in the midst of this crisis (Gillespie and Hennessey 2011). However, the biggest mistake was introducing a product consumers were not aware of. The consumers already had an emotional attachment to the product and they could identify with it. They did not put this into consideration when launching new coke. The customers also identified with not just the taste of the product but also the logo which at the time dated back to the 1880’s (Louis and Yazijian 1980). Coca-Cola made a mistake by not first creating a campaign to let the people be aware of the changes and the significance of this change. If people had been made aware through proper marketing skills, then the reaction amounting to shock could have been prevented and people could have easily adopted the new coke. Lack of brand awareness was the main problem. When the company launched its product in the 1880’s, it was the only in the market. Therefore, it invented a new brand name and the name became the product itself. It capitalised on its originality and especially in the campaigns. It branded itself as the real thing. By re-branding, it contradicted the previous marketing efforts (Haig 2005). 5. Discuss why you should study marketing Marketing is an important course for both those who wish to pursue a career in marketing as well as the consumers themselves. Products do not sell themselves as it has been said in the past (Majumda 1991). Its good marketing that educates consumers such that they find the products they want make better choices and gain the most value in those products. As such, marketing helps facilitate exchanges for between sellers and buyers for mutual benefit. Good marketing allows people to make informed decisions for themselves and the good of others. Marketing delivers value Marketing delivers value to the customers and translates this value into the value of the business as it develops a reliable customer base consequently increasing sales and profitability. This value is delivered to both the customer and the business (Bruggen and Wierenga 2010). Benefit to the society Marketing benefits society in by improving the lives of people in two ways. First, it facilitates trade. The ability to trade makes people’s lives better. In addition, better marketing means more successful companies, thus jobs are created. This generates wealth for people, who are then able to make purchases, which, in turn, creates more jobs. Secondly, marketing improves the quality of life as per the value delivery function of marketing, but in a broader sense. When all marketers are put together, who are trying to deliver services of greater value to consumers and are effectively communicating that value, consumers are able to make more informed decisions about a wider range of choices. From an economic perspective, more choices and smarter consumers are an indicator of a higher quality of life. Career opportunities Marketing offers an opportunity to keep the customers satisfied and make money at the same time. There are many areas a person who has background in marketing can fit in. These include: Marketing research- this is where professionals study the market to know the best strategies and tactics to use to gain and retain customers. Merchandising- they develop strategies as to what products wholesalers should employ to ell to retailers. Sales- they meet with the customers and access their needs make offers and keep the customers satisfied. Other careers in the marketing department include advertising, product development, direct marketing, digital media, event marketing as well as non profit marketing. A career in this field can begin at an entry level position and later move to high level executives.Marketing is a good career choice since it does not confine you to one area as one can perform different roles at the same time such as advertising and sales Lamb 2012) Bibliography Doole, I., & Lowe, R. (2012). International marketing strategy: Analysis, development and implementation. Andover, Cengage Learning. Hone, D., Nord, L., Egenhofer, C., & Fujiwara, N. (2005). Reviewing the EU emissions trading scheme: priorities for short-term implementation of the second-round of allocation. Brussels, Centre for European Policy Studies. Haseman, Z. (2013). Integrating environmental sustainability into airport contracts. Smith, T. J. (2012). Pricing strategy: setting price levels, managing price discounts, & establishing price structures. Mason, Oh, South-Western Cengage Learning. Engelson, M. (1995). Pricing strategy: an interdisciplinary approach. Portland, OR, Joint Management Strategy. Louis, J., & Yazijian, H. Z. (1980). The cola wars. New York, Everest House. Haig, M. (2005). Brand failures: the truth about the 100 biggest branding mistakes of all time. London, Kogan Page. Majumdar, R. (1991). Marking research: text, applications and case studies. New Delhi, New Age International (P) Ltd. Lamb, C. W. (2012). Marketing. Toronto, Nelson Education. Gillespie, K., & Hennessey, H. D. (2011). Global marketing. Australia, South-Western Cengage Learning. Bruggen, G. H. V., & Wierenga, B. (2010). Marketing decision making and decision support: challenges and perspectives for successful marketing management support systems. Boston, now. Read More