Corporate Strategy and Strategic Marketing - Essay Example

STRATEGIC MARKETING MANAGEMENT 0 Corporate strategy and strategic marketing Strategy refers to a plan to achieve specific objectives over a long time. Strategic marketing therefore, refers to the idea of making long-term marketing plans to attain specific marketing targets. For instance, the marketing target of Apple Inc. is to become the market leader by supplying products that best satisfy consumers than all the other players in the industry (Reder 2009). Strategic marketing is therefore, a detailed plan that incorporates good market research and followed by the development of product promotion blend to attract consumers. On the other hand, corporate strategy describes the manner the organisation creates value across the various businesses. It concerns with the current position of the organisation, where the organisation wants to reach and the means of reaching there (Knights & Morgan 1991). This in turn, requires the organisation to engage in the investment of a set of valuable resources, crafting the portfolio of the business and designing the structure of the organisation, systems, functions as well as skills across the entire organisation. As opposed to strategic marketing that mostly focuses on expanding the market share for the organisation’s products, corporate strategy mostly focus on increasing profitability. For example, some of the corporate strategies employed by Apple Inc. include; creation of a suitable organisational structure, improving the balance sheet through debt reduction, product diversification to eliminate overdependence on a single product, acquisition of other businesses to establish economies of scale, reducing overhead costs and improving technology (Reder 2009). 1.2 The role of strategic marketing Strategic marketing helps the organisation to supply products that will be accepted by consumers and at the most appropriate prices that will help to enhance profitability. This is because of the idea that the organisation starts with good market research to determine what consumers, the targeted group of consumers, the strengths and the weaknesses of competitors and future trends (McDaniel & Rylander 1993). The firm can then redesign and differentiate its products to meet and exceed consumers’ expectations that in turn expand the market share and also enhance profitability. Additionally, strategic marketing helps the organisation to determine the optimal prices for its products in the various environments in which it operates (McDaniel & Rylander 1993). If high price establishes a perception of high value then the organisation can improve the quality of the product and offer the product at a higher price. Conversely, if the customers are only willing to buy the product at the lowest price then the organisation adopts more efficient methods of production to lower the cost of production that can allow it to offer lower prices. This will ensure that the organisation can always meet its objectives and remain most powerful in the industry. Strategic marketing also enables the various departments of the organisation to co-ordinate effectively to meet the overall goals set. This is because; all the departments will be working using a single plan (McDaniel & Rylander 1993). For example, the marketing department co-ordinates with the product development department to know the exact information that it can pass to consumers regarding the functionality and the benefit of the products. In this manner, strategic marketing eliminates any form of confusion concerning the roles and responsibilities of each department in achieving the overall goals of the organisation. 1.3 Processes and models in strategic marketing The first process in strategic marketing is the articulation of the reason the organisation exists followed by the means of benefiting consumers over a long time. More specifically, this mission intends at anticipating the future as well as providing a description concerning an ongoing responsibility for the products of the organisation (Hackley 1999). For instance, the mission of Apple Inc. is to provide innovated products that best meet consumers’ expectations. The other process in strategic marketing is the conduction of SWOT analysis that aims at evaluating and prioritising the organisation’s strengths, the weaknesses, the opportunities and the threats. This will enable the organisation to identify the resources it can establish on as well as the challenges it faces. The strengths and the weaknesses make up the internal factors under the control of the organisation while opportunities and the threats are external factors that the organisation has no direct control. For example, the good consumer perception concerning the quality of the products of Apple Inc. is a major strength while the perception that Apple products are always expensive is a weakness. Also, improvement in the global economy is an opportunity while trade barriers and tax increase are threats to the growth and expansion of the organisation. Finally, the other process in strategic marketing is setting marketing targets. When the targets are clear and measurable, then they will assist the organisation in assessing progress and making choices. Most important, the organisation specifies the period of time suitable for each individual objective to speed up growth. In conclusion, mission, SWOT analysis and objectives form the basis for strategic marketing that in turn supports the corporate strategy of the organisation. 2.0 The Focus Method of Strategic Marketing Focus is one of the key strategic marketing models used by many organisations in the current global environment of business operations characterised by stiff competition. The model suggests that the organisation should concentrate on a particular factor that can perform best than all other players in the market (Leeflang & Wittink 2000). The components of the model include; product segmentation, introduction of new products, product line, pricing, promotion, geographical positioning, distribution and public relations. With product segmentation, the organisation focuses on the provision of different range of products to meet the expectations of different classes of consumers. The organisation according to Lockshin, Spawton & Macintosh (1997) identifies the various classes of consumers and redesigns a specific product that specifically addresses the needs of the members that belong to that class. The success of this approach depends on the ability of the organisation to communicate to the members of the chosen class that the product is specifically theirs. This also aims at retaining and winning customer loyalty to continue buying the products offered by the organisation. Introduction of new products aims at influencing consumers to accept the idea that the organisation is conducting continuous improvement in order to meet their needs adequately (Kim, Nam & Stimpert 2004). An organisation struggles to be the first to introduce a given new product and implementation of a new method of production to win the tastes of consumers before others. Usually, the firm that focuses on the introduction of large number of new products manages to influence consumers to accept its products before the rivals. This approach is very common with the organisations that produce technical products. Product line refers to the idea that the company focuses on a specific line of products that it can produce most cheaply and at the lowest cost than its rivals (Kim, Nam & Stimpert 2004). This is especially, common when the organisation feels inappropriate to compete by producing similar products as the rivals. It also occurs when the organisation wants to ease marketing research and lower product promotional costs since each product may require a different product promotional strategy that best suits its nature and character of its consumers. With pricing, the organisation struggles to offer much lower prices than its rivals for the same product quality. Usually, in a situation where two products have equal functionality with equal capability of satisfying the same need, the consumer will prefer the one offered at the lowest price. This is mostly applicable in market areas where consumers are very price sensitive rather than the quality of the product. An organisation intending to employ this strategy, according to Kim, Nam & Stimpert (2004) must adopt very efficient methods of production in order to lower the cost of production. With promotion, the organisation decides to promote a specific brand or group of brands from a wide range of products that it offers to consumers. For example, the organisation can decide to promote a specific brand whose demand is lower or to educate the consumers to gain knowledge concerning the existence and the functionality of the brand (Ulaga & Chacour 2001). It also occurs when the organisation lacks the capability of promoting all the brands at once or during a particular season that the consumers buy the brand in large quantity. The approach is also suitable in fighting the threat posed by the rivals due to imitation. Geographical positioning refers to the idea of the organisation to focus on a particular geographical area. The organisation offers products that best meet the expectations of consumers at that chosen geographical area (Leonidou, Katsikeas & Samiee 2002). With this approach, it is very difficult for other players to enter and seize the market share of the organisation. It is very common for organisations that aim at avoiding the risks posed by rapid expansion of its operations across borders. In addition, it is suitable for organisations that lack adequate resources to conduct market research and exploration of new opportunities in other regions. With distribution, the organisation focuses on the most efficient channels of distribution to ensure that its products reach consumers within the shortest time possible and at the lowest costs (Leeflang & Wittink 2000). With this strategy, the organisation ensures that consumers can access its products most easily than its rivals. The organisation establishes close links with the most efficient distributors and provides incentives to ensure that they prefer distributing its products before those of the rivals. Finally, with public relations, the organisation focuses on aggressive campaigns to establish good public relations to create good public image. In turn, consumers develop positive attitude towards the organisation and the products it offers to the market. With this strategy, consumers become less sensitive to price differences and quality of products and become more loyal to the company (Kim, Nam & Stimpert 2004). This will help the organisation to expand or retain its market share and survive competition. In conclusion, the focus model entails what the organisation feels it can perform better than all other players and use it as a means of acquiring a competitive advantage. 2.1 Promotion approach Promotion is the best approach that Apple Inc. can employ to attain its marketing objectives. With this approach, Apple Inc. should focus on conducting strong product promotional campaigns to inform consumers on the availability of its products in the market. This will also aim at enabling consumers to differentiate the products offered by the organisation with the other similar products offered by the rivals. With this approach, Apple is capable of intercepting the high threat posed by imitation. Also, it will help safeguard the image of the organisation concerning price sensitivity since most consumers prefer other products due to cheaper prices offered by the rivals. Apple, according to Reder (2009) will achieve a competitive advantage because of its culture of continuous invention and innovation of its products. Product differentiation is also very important since the organisation will impart specific features difficult for rivals to imitate. There will be no confusion on what the product promotion plan will be targeting and the methods used. It will reduce consumer choices and hence less sensitive to price differences (Lockshin, Spawton & Macintosh 1997). They will now use quality as the basis for making buying decisions that will place the Apple Inc. at the best position because of its advanced technology in the field over the rivals. Differentiation will also help lower the cost of product promotion and the time taken for consumers to understand the particular product. When Apple Inc. engages in relationship marketing, product promotional campaign will be less detailed as it will only require informing consumers on the availability of the product and the specific new features added. Good relationship with consumers shortens the duration taken for the message to reach other consumers since experienced customers will be willing to share information with others. Relationship marketing establishes emotional effects in consumers concerning the products of the organisation that in turn will continue to reduce the frequency that consumers will want to hear about the products that in turn leads to reduced costs of marketing (Grönroos 1995). In conclusion, the organisation is capable of winning customer loyalty through the employment of various marketing tactics that in turn supports its promotional campaigns. This in turn will ensure that the organisation benefits optimally, from its advanced technological know-how and the culture of continuous introduction of new innovated products in the market. In the modern world of business operations, consumers are increasingly becoming less sensitive to price differences and making buying decisions based on quality and hence promotion remains the best approach for an organisation committed to continuous invention and innovation of its products. 3.0 Key factors in the external environment In the recent years, there have been a large number of new players flooding the market with different categories of products with strong marketing as well as product promotional campaigns. Consequently, consumers are becoming more educated over time and thus they are becoming more sensitive to the technological specifications of the products rather than focusing only on the brand (Cui, Trent, Sullivan & Matiru 2003). They thus continue to base their buying decisions on the value that the supplier offers to them. This continues to place the organisations that are capable of supplying the best products using the most recent technologies at a better position. This is because; the product promotional campaigns will only focus on describing the specific technological features that makes the product unique from those offered by the rivals. In this manner, the Apple continues to gain better opportunity and position to expand its market. Currently, consumers find it easier to compare the similarities and the differences between wide ranges of products. During the process of evaluating a new product introduced into the market, consumers relate the product to another product already existing in the market to see if there is any improvement or unique feature added (Cui, Trent, Sullivan & Matiru 2003). The decision to buy or not to buy the product is mostly coming from the differences rather than from the similarities between the products. For example, when consumers find two televisions with the same price and functional characteristics, they usually go for the one with a bigger screen. When the two televisions have the same size of the screen then consumers will look for another feature that will differentiate the two. This therefore, means that promoting that unique feature will influence the consumers to prefer the product offered by the organisation over other similar products offered by the rivals. In addition, consumers in the current business environment tend to resist change and base their decisions from past experiences concerning the products offered by a particular organisation. In some market places, consumers have very outdated attitudes concerning the qualities and functionality of new products introduced into the market (Cui, Trent, Sullivan & Matiru 2003). Promotion therefore should aim at allowing consumers to try the product and gain experience of the new product. This will help eliminate rigidity and thus the introduction of the new improved product will create a strong path for growth. In addition, brand recognition continues to become a very important factor in influencing the choice of consumers (Cui, Trent, Sullivan & Matiru 2003). Apple Inc. can thus make its environmental labeling to be easily recognised and then promote it in a manner that it becomes easier for consumers to recognise it. This will also help to build customer loyalty that ensures that the organisation is capable of retaining its customers despite the presence of many players in the global market. In the current world of business operations, not all consumers have a clear knowledge concerning the specific features on every particular product. This arises due to the heavy marketing campaigns conducted by the various organisations that end up into confusion. Avoiding the problem means standardizing the choice (Cui, Trent, Sullivan & Matiru 2003). Promotion should aim at describing the prices, the features and the packaging in a standardized manner. This will enable consumers to make comparisons easily in order to make good decisions in favour of the products the organisation it offers. In other words, innovation and introduction of new products will not guarantee growth unless there is good product promotional campaign to inform consumers about the availability of the new product and the specific improvements done to address their needs adequately. 3.1 Strategic marketing objectives Strategic marketing of Apple Inc. should aim at establishing good customer loyalty towards the products it supplies in the market. This will ensure that customers will always be willing to test the new products introduced and hence gain experience of the products and understand the differences between the products and the ones already existing (Lockshin, Spawton & Macintosh 1997). This will also help to safeguard the market share from the threat of new players entering the market. In addition, strategic marketing should aim at influencing consumers to focus on quality and functionality of the products rather than price differences (Lockshin, Spawton & Macintosh 1997). This will ensure that Apple Inc. protects itself from cheaper and low quality products offered by the rivals. It will also help in achieving the major objective of remaining the most dominant player in the global market of consumer electronics. Lastly, strategic marketing should aim at creating good public image in the minds of consumers. This will have an effect of creating a positive emotional effect concerning the organisation and the products it offers in the market. This in turn will help safeguard the market share of the organisation’s products over a long period since the customers will always want to keep attached and become part of the organisation (Ulaga & Chacour 2001). It will thus be very difficult for another player to influence them against the organisation hence sustained growth. In conclusion, strategic marketing should take an advantage of the emerging buying behaviour of consumers to ensure continuous growth and expansion. 4.0 How to win customer loyalty There are a number of paths that Apple Inc. can use to achieve this objective that is very important in achieving sustained growth. Firstly, the organisation can commit itself to offering quality products that adequately, meets the expectations of consumers. This will help build trust and confidence in the minds of consumers concerning the capability of the organisation to satisfy their needs (Oly Ndubisi 2007). They will thus be willing to buy its products all the time at whatever price offered. Apple Inc. has great potential of implementing this strategy based on the strong foundation laid down by the founders of the organisation. Secondly, Apple Inc. can focus on continuous improvement of its products. This is because; using a similar product over a long time may instill negative attitude concerning the product and the organisation (Oly Ndubisi 2007). Continuous improvement therefore, means retained interest in the purchase and use of the products. The organisation is best suited for this because of its high technological advancements over other players and excellent implementation of the most recent technologies than others. Lastly, Apple Inc. can resolve into aggressive advertisement to popularise the company and the products it offers into the market (Lockshin, Spawton & Macintosh 1997). However, this may add to the cost incurred by the organisation and produce less significant effect due to the higher prices the organisation offers its products compared with those of the rivals. In addition, this may not be successful because of the high overhead costs the company incurs in its daily operations. 4.1 Risks faced by the organisation There are a number of risks that the organisation faces in the path to create customer loyalty. First, there is the risk of losing value to other players due to the culture of imitation. Some of the rivals imitate what the organisation produces and impart similar features to influence consumers to prefer their cheaper products (DellEra & Verganti 2007). The organisation must therefore, employ good differentiation approaches to help consumers to identify its products from similar products produced by the rivals. In addition, constant improvement will require much research concerning the means of improving the products (Lockshin, Spawton & Macintosh 1997). This may add to the costs and need for development and training of employees. The organisation must therefore, establish an efficient network to ease information sharing to ease innovation and improvement. It also has to establish close links with consumers to effectively, understand what they need and their expectations in the future. Conclusively, strategic marketing involves setting up of mission, good market research and identification of the marketing objectives the organisation wishes to attain. Strategic marketing is a key component that greatly supports the corporate strategy. Corporate strategy involves the identification of the current position of the organisation in the industry, where it intends to reach and the methods to be used for adding value to attain its targets. In strategic marketing, the organisation needs to identify an important factor that best suits it than all other players in the market and use it to gain a competitive advantage. Bibliography Cui, Y., Trent, E. S., Sullivan, P. M., & Matiru, G. N. 2003, ‘Cause-related marketing: How generation Y responds’, International Journal of Retail & Distribution Management, Vol. 31, No. 6, pp. 310-320. DellEra, C., & Verganti, R. 2007, ‘Strategies of innovation and imitation of product languages’, Journal of Product Innovation Management, Vol. 24, No. 6, 580-599. Grönroos, C. 1995, ‘Relationship marketing: the strategy continuum’, Journal of the Academy of Marketing Science, Vol. 23, No. 4, pp. 252-254. Hackley, C. E. 1999, ‘Tacit knowledge and the epistemology of expertise in strategic marketing management’, European Journal of Marketing, Vol. 33, No.7, pp. 720-736. Kim, E., Nam, D. I., & Stimpert, J. L. 2004, ‘The applicability of Porter’s generic strategies in the digital age: Assumptions, conjectures, and suggestions’, Journal of Management, Vol. 30, No.5, pp. 569-589. Knights, D., & Morgan, G. 1991, ‘Corporate strategy, organisations, and subjectivity: A critique’, Organisation studies, Vol. 12, No. 2, pp. 251-273. Leeflang, P. S., & Wittink, D. R. 2000, ‘Building models for marketing decisions: Past, present and future’, International journal of research in marketing, Vol. 17, No. 2, pp. 105-126. Leonidou, L. C., Katsikeas, C. S., & Samiee, S. 2002, ‘Marketing strategy determinants of export performance: a meta-analysis’, Journal of Business research, Vol. 55, No. 1, pp. 51-67. Lockshin, L. S., Spawton, A. L., & Macintosh, G. 1997, ‘Using product, brand and purchasing involvement for retail segmentation’, Journal of Retailing and Consumer services, Vol. 4, No. 3, pp. 171-183. McDaniel, S. W., & Rylander, D. H. 1993, ‘Strategic green marketing’, Journal of consumer marketing, Vol. 10, No. 3, pp. 4-10. Oly Ndubisi, N. 2007, ‘Relationship marketing and customer loyalty’, Marketing intelligence & planning, Vol. 25, No.1, pp. 98-106. Reder, M. E. 2009, ‘Case study of Apple, Inc. for business law students: How Apples business model controls digital content through legal and technological means’, Journal of Legal Studies Education, Vol. 26, pp. 185-209. Ulaga, W., & Chacour, S. 2001, ‘Measuring customer-perceived value in business markets: a prerequisite for marketing strategy development and implementation’, Industrial marketing management, Vol. 30, No. 6, pp. 525-540. Read More