Strategies, Tools, And Techniques For Marketing Success - Case Study Example

 Strategies, Tools, And Techniques For Marketing Success Table of Contents Introduction 2 Autocratic Management and Communication Gap 3 Industrial Sabotage and complex working schedule system 4 Low profitability 5 Pollution 7 Recommendation 7 Possible negative publicity and legal punishments 8 Human Capital 9 Conclusion 11 References 13 Bibliography 14 Appendices 15 Introduction This report is about a hypothetical company called Pest-u-like. The company is involved in manufacturing pesticides in UK. It is a 30 years old company. Various customers of pest-u-like include garden centres, large farms and individual customers. Individual customers are reached through shops; garden centres are reached through personal contact, whereas large farms are reached through cargo shipped and pest-u-like vans. There are total 300 employees working in the company. Annual turnover of pest-u-like is approximately 50 million euro every year. The Managing director of the company owns most of the shares (almost 55%). Recently pest-u-like has been facing legal charges for spreading pollution. The company was accused of leaking pesticide into a nearby water body and thereby polluting the environment. According to the press report ‘Federation of Fertilizers and Pesticides Makers’ fought this case for pest u like, as the company has a subscription with this organization. The company tries to follow the European guidelines as far as working time is concerned. But it is such a company where the type of management is autocratic with the managing director usually taking all the major decisions in the operations of the company. As a result, the workforce of the company is hardly involved in any decision making process of the company. The management usually does not consult with the workforce before making any decisions. All the procedures and roles are measured in the company. Most importantly this style has resulted to enhanced productivity of pesticides in the past. But unfortunately a section of the employees were not happy with the system and this has resulted to industrial sabotage. Moreover, there are high attrition rate in the company. Fortunately, this event of employee attrition does not seem to affect the company too much because the factory of the company has its location in such a place where unemployment rate is quite high. Furthermore there was another important factor called recession which resulted to increase in available candidates who could be employed in the organization. In the last year there was sharp decline in the volume of pesticides which were produced. As a result the management of the company is under pressure. Now it is important to find out the areas where the company management made mistakes. Various strategic models are used in this paper in order to find these areas and then possible recommendations are made on the basis of current internal and external environment of the organization. Various issues Autocratic Management and Communication Gap The management of Pest U Like is autocratic in nature. With 55% share, the company’s managing director is the major shareholder of the company. As a result he make all the decisions regarding any major issues and then passes those decisions to the lower level managers who again transfer them to the workers as per the relevance. So it is quite clear that there is hardly any involvement of the common employees in any decision making process. Even the lower management sometimes feel ignored by the organisation especially in the case of any decision that is taken without consulting them. As a result there is considerable communication gap between the management and the workers in the company. This is because any decision adopted by the management does not involve workers. Communication gap is a major issue for any organisation as lack of job satisfaction among the employees would lead to lowering of productivity. The two issues of autocratic management and communication gap could be found from both SWOT analysis and Rich picture. SWOT analysis is another major strategic tool which is widely used in the industry. SWOT stands for strength, weakness, opportunities and threat (Kotler, Keller, 2007). Recommendation In order to tackle this issue organization policy of decision making should be changed immediately. Each and every decision should be made by involving all the employees who would be associated with the implementation and result of that decision. Top management should consult with the middle level management and middle level management should consult with lower management and other employees. The company must resort to practicing hierarchical flow of information. Any decision regarding any change in the organization should be properly communicated to each and every employee of the organization so that everybody has a clear idea regarding the requirement of that change in the organization. This would also be instrumental in getting ideas which might prove beneficial to the organization. A proper involvement of the employees in the decision making process will definitely lead to increase in the level of satisfaction. Industrial Sabotage and complex working schedule system In Pest U Like, the lower level workers are not satisfied with the management of the organisation. They are unhappy with the work culture, decision making process in the organisation and work schedule in the company. This dissatisfaction results to industrial sabotage. This is issue could be found from the threats in the SWOT analysis. Industrial sabotage would increase the total cost of operation of the organisation. Moreover in Pest U Like the system of working schedule is quite complex. There are three shifts (12-8, 8-4, 4-12). As a result one worker once in a month must work 16 hours in a day and this is totally against the law. This problem holds in itself a potential legal threat that the company might face anytime in future. So it is one of the most critical and burning issues for the company. This issue also could be found from the SWOT analysis. Recommendation The problem of industrial sabotage could be overcome by adopting policies that would increase the employee satisfaction. Involving workers in the decision making process and proper communication with them would solve the problem. The problem of work schedule could overcome by adopting proper human resource policies. There should be different team of workers for different schedules, so that no worker needs to work for 16 hours in a day. Low profitability Low profitability could be another major issue for Pest U Like. But there are several reasons that culminate in suffering from low profitability. These are falling sales, high employee turnover rate and recession. The company has recently found out that its annual sales are decreasing. This is a major issue for the company as sales is mainly responsible for the company’s revenue. Sales growth is crucial for staying ahead in the competition for a long time. Again lowering of sales growth could be the result of recession and fall in product quality. Moreover in this company employee turnover rate is near about 40% which is very high. This is because of the dissatisfaction among the employees. High employee turnover increase the recruitment and training cost of the organisation. As a result, total cost of operation for the company increases and this result to low profitability. High employee turnover is the reflection of wrong human resource policy of the organisation. Recession is another big issue for Pest U Like. It is true that the company’s high attrition rate is actually getting compensated by the situation created because of recession. Also, the company’s plant is located in such an area where the unemployment rate is high and recession has made that situation worse. As a result company is able to get large number of candidates easily. But in reality recession is a big threat to every company because ultimately it reduces the overall demand of the product. In case of Pest U Like also recession could actually lower the demand of the product because the product that the company is manufacturing is actually not among the basic needs of the people. In a period of recession, the disposable income of people gets lowered. As a result consumers would think twice before purchasing anything. They will buy those things first which would meet their basic needs. Pesticide is not among these; it is probably one of the secondary needs of people. As a result the demand of pesticide would decline at the time of recession. Lower demand of the product leads to lower profitability. Recommendation In case of Pest U Like one way of improving profitability is to improve the sales volume. Sales are the main source of revenue. Sales could be improved by improving the quality of the product, huge promotions, aggressive sales team etc. Moreover the company need to adopt proper strategies which would be effective for retaining experienced existing employees so that productivity increases significantly. It must be realised the by losing an experienced personnel, the company is running the risk of losing potential sales and expertise. There should be various employee benefits such as flexible working hours, health care facility, facilities for the employee family members, incentives, bonus etc. Current global recession which has resulted in the reduction of demand of almost all the products is also likely to affect Pest U Like. Company can take several cost cutting measures but must be careful so that cost cutting measures do not affect employee rights in the organization. Pollution Perhaps the most critical of issues in case of Pest U Like is pollution. Pollution is one of the most sensitive issues not only in UK but in the world. It is a relevant issue for Pest U Like because the company has been accused of polluting a nearby river. The river is polluted due to leakage of pesticides from Pest U Like’s plant. This incident indicates that there is huge lack of responsibility and professionalism from Pest U Like’s part towards the society. At a time when every organization is trying to contribute in the movement of pollution reduction, Pest U Like has been accused of doing the reverse. This would greatly affect the company’s social image. The company is already facing legal complications. According to media reports ‘Federation of Fertilisers and Pesticides Makers’ is fighting the case on behalf of the company. This issue could be found from PESTLE analysis. Recommendation In order to overcome the situation Pest U Like should participate in various pollution reduction movements in the country. It should be more responsible and professional towards the society and pollution issue in future. The company should also try to use advanced technology and machinery which would cause less pollution. It should try to come up with some new type pesticides that would not cause any soil or water pollution. The management must realize that a clean corporate and social image has a significant impact on the way the customers perceive a company. Efficient and effective measures in this direction will surely be a major determinant of the success of the business. Possible negative publicity and legal punishments Pest U Like has already faced lawsuits as there is allegation that the company has polluted the water of a nearby river by leaking pesticides into the river. This is a big issue because in UK government and people are very much concerned about the environment of the country. There is huge amount of cost associated with various legal procedures regarding this issue. As a result the company might be facing huge financial challenges. Lawsuits affect any organization. There are several examples where lawsuits have damaged company’s financial health and overall image in the market. This issue could be found from the threats in the SWOT analysis of the company. Moreover this would harm its social image. There is huge possibility of negative publicity of the company which could affect its sales. The company has been accused of polluting its environment due to the leakage of pesticide into a river nearby company’s plant. As a result Pest U Like’s social image might be affected. Since the company is a pesticide manufacturing company it has to focus on the society in order to sustain for a long time. Negative social image of the company could affect its sales which in turn would affect the profitability. Recommendation The problem of lawsuits could be overcome by hiring best of legal experts or by offering huge bribes to the party who has made the allegation. But then this could be a risky and costly attempt to overcome the solution. Pest U Like can also adopt the strategy of moving the spotlight from this issue. This could be done by introducing a very innovative products or services. The company can even use the situation to promote some of its new products. It should bombard the market with the heavy promotion of its various products. Apart from these, in order to improve its social image, Pest U Like should take the responsibility of cleaning the river, although there might be huge cost associated with it. Company can improve its image by participating in various social welfare programs. It can hire some local popular stars to promote its brand image in the society. It would also be in the interest of the company to lead and organize various conferences and seminars on current environmental issues. Human Capital Despite of the fact that Pest U Like is a 30 years old company, but there are only 300 employees till now. As a result it is quite clear that the company has not been able to make a strong human capital. Moreover it has been found from the PESTLE analysis that the country is suffering from ageing population, which means most of the people are either middle aged or old. The number of workers is also very low in the country. There is huge shortage of young workers. As a result it is quite difficult to find suitable candidates. On top of this Pest U Like has high attrition rate (almost 40%) which makes the situation tougher for the company to improve its human capital. Human resource is the biggest asset of any organization. As a result human capital management and retention is a major issue for any organization. This issue could be found in the balanced scorecard analysis of Pest U Like. Employment law is an important issue which is associated with the human capital issue in case of Pest U Like as the company need to know these laws very well. In UK there are various employment laws and company laws. There are national minimum wage (NMW) rate, workers’ wage should not be below this rate. But this rate varies with the age of the worker. As present NMW rate for the workers whose age is 22 years or above, is 5.80 Euro (Directgov, n.d.). Employees need not to work for over 48 hours in a week. This is the average maximum working hour per week; however employees are free to work more than this by their own choice. In Pest U Like there is rotation system for employees. This actually makes the system of working more complex. There could be lack of motivation among the employees because of complex work schedules. The company should follow various employment laws properly otherwise it might again face another lawsuit in future. The issue of employment law could be found from the PESTLE analysis of the company. The recent global financial turmoil has resulted in a huge unemployment rate in the country. In 2008 unemployment rate in UK was 5.6% (Central Intelligence Agency, n.d.). This is an important issue in the context of company’s human capital as well as its responsibility towards the country and its society. Pest U Like might face some pressure from the government to increase the number of employees so that the local economic condition gets little improved. But the company has only 300 employees today and it hardly has any capacity to improve its employee strength. This issue could be observed from the PESTLE analysis. Unemployment rate is an important issue for any organization. Companies usually get huge benefited because of high unemployment rate. They get appropriate candidates at a very lower cost. Recommendation Pest U Like should change strategy regarding existing employees in the company. People who are already working in the company, are capable of provide much better performance than any new candidates. These existing employees are the most important human capital that the company ever could have. But then in reality no organization can sustain with its existing employees only. It has to find out new talent in order to build a strong human capital and stay ahead in the competition. As a result Pest U Like must find out new talent in order to sustain for a long time. In order to overcome various complex scenarios of employment laws Pest U like should hire some experts in the relevant field. The company should properly explain its working system, working schedule and working cultures to these experts so that they can have clear idea regarding the situation and provide advice accordingly. In order to overcome the problem of high unemployment rate Pest U Like can recruit some people on a temporary basis as well. This would create few job opportunities in the local region and help in the economic recovery process. Conclusion Like any other organization Pest U Like also had several issues associated with it. It is a 30 years old company but there are some major issues which should not be there for such an old company. These issues are identified by using various strategic tools like rich picture, PEST analysis, SWOT analysis and balanced scorecard. Rich picture is such a structure where each and every possible interaction in the organizations is represented. This structure helps to find out various organizational issues which are affecting its performance. PEST analysis helps to identify various political, economical, social and technological issues which are there in the external environment of the organization. On the other hand SWOT analysis helps to identify issues regarding organization’s internal strength and weaknesses and external opportunities and threats. Finally a balanced scorecard helps to figure out issues from various perspectives which include financial perspective, business perspective, learning perspective and finally customer perspective. Balanced scorecard was developed by Robert Kaplan and David Norton (Value Based Management.net, n.d.). In case of Pest U Like all these strategic tools are used in order to find out various issues like employee dissatisfaction, high attrition rate, industrial sabotage, legal issue regarding polluting a river etc. Once these issues are identified, appropriate recommendations are made in order to address these issues properly. References Cheverton, P. 2004, Key marketing skills: strategies, tools, and techniques for marketing success, Kogan Page Publishers Central Intelligence Agency. No date. The World Fact Book. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html [Accessed on December 15, 2009] Directgov, No Date, The National Minimum Wage rates, Employment, [Online]. Available at: http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201 [Accessed on December 17, 2009] Value Based Management.net, No Date, Clarifying and communicating vision and strategy into action: The BSC Framework, Balanced Scorecard method, [Online]. Available at: http://www.valuebasedmanagement.net/methods_balancedscorecard.html [Accessed on December 16, 2009] Kotler, P. Keller, K. 2007, Marketing Management, Pearson Education Bibliography Kaplan, R. S. Norton, D. P. 1996, The balanced scorecard: translating strategy into action, Harvard Business Press Olve, 2006, Balanced Scorecard, Wiley-India Appendices Rich Picture SWOT Analysis PESTLE Analysis Corporate tax rates in UK 20%-28% EU regulations Taxes POLITICAL ECONOMICAL Average income Unemployment rate (5,6% in 2008) Economic growth (0,7% in 2008) Ageing population SOCIAL TECHNOLOGICAL Continuously improvement processes in technologies Technology improvements help the management and organisation to work more efficient and effective Innovation potential in future Climate change (impact on farmers) Environmental pollution (higher taxes → higher prices) Increasing power supply cost ENVIRONMENTAL LEGAL Consumer laws Competition laws Employment laws Health and safety legislation Regulations Balanced Scorecard PERSPECTIVES GOALS MEASUREMENT FINANCIAL Increase rentability Return on equity Cost reduction Comparing costs Growth Sales and economic growth Increasing market share % market share Maximize profit Calculate profit/comparing CUSTOMER Customer satisfaction Proportion of satisfied customers Price competitive Price index INTERNALBUSINESS PRICES Improve complaint solving time Solving time Establish new products on market Number of new products Improve customer management process Customer value LEARNING AND GROWTH Increase human capital Productivity Improve loyalty of employees Employee turnover Improve information capital Success ratio Read More