Strategic Marketing: Creating and Sustaining Superior Performance - Assignment Example

Strategic Marketing Tutorial one Corporate appraisal Corporate appraisal can be briefly described as assessment of both the strengths and weaknesses of a business organization to review its readiness to interact with its external environment in which it operates successfully. This will help come up with an appraisal report that will give results of the assessment with various recommendations on how the business organization can go about this. A business organization is supposed to undertake corporate appraisal after every financial year when all the financial performance records and statements have been prepared. Therefore, the corporate appraisal report is supposed to reflect on the business performance as per that particular ended year. There are various arguments for and against the undertaking of yearly corporate appraisal. It has been argued that carrying out of yearly corporate appraisal helps the business organization to develop a better understanding of its clients in terms of what they have done in the past and what they are currently doing. It also helps establish the reasons why the clients may have performed to the present level and why not better. It establishes how they can perform better than the way they have done including their readiness to perform better. Finally it establishes their strengths and weakness for rectification. Yearly appraisal will help the business organization asses the general perception of the external environment within a recommendable time span so that it can make any rectifications before it is too late to make such corrections considering that the customers and the competitors belong to the external environment. However there have been few arguments relating to undertaking of yearly corporate appraisal some of which argue in terms of expenditure to the company. It has been argued that undertaking of corporate appraisal every year is costly to the business organization in terms of finance and labor. Hiring of professionals or assigning of this duty to staff members is costly and requires extra expenses therefore should not be done yearly but rather when urgently required. Others include repetition of same results and monotony which are not beneficial to the business organization. Marketing resources of importance in cosmetics industry In order to obtain success in the cosmetics industry, the marketing resources of importance include the following. The first one is marketing management. The firm needs a qualified and competent marketing management to govern all the other marketing resources and give direction towards attainment of success. The core values or objectives of the firm are an important marketing resource to spearhead the entire marketing team towards success of the firm. Then the corporate culture which entails all the people with significant interest in the company as far as success is concerned. They form an important marketing resource especially the customers, suppliers, financiers, government and the general society all of which spearhead the marketing process (Edwards 1995). The other marketing resources of importance include competitor analysis. Competitors are enemies to the firm and need to be out competed. Any strategy that will see the competitors suppressed will be an important resource to the success of the business. Since this is a cosmetic industry, fashion, customer preference, quality in terms of standardization, advertisement and good customer relations will be the best strategies for success. Tutorial two Understanding the business environment The relevance of environment constituents to Amazon e-books The environment is where the strategic business unit (SBU) operates. The environment has several constituents both in the macro and micro environment of the business. Some of the constituents in the microenvironment include customers, competitors, suppliers, public, intermediaries and other companies. In the macro environment, the constituents include cultural, demographic, political, technological, natural and economic factors. All this constituents of the business environment are relevant to the business in one way or another. Considering the SBU in this SMP project which is the Amazon e-books, most of the stated environment constituents directly or indirectly influence this SBU in one or several ways as follows. The competitors form the first relevant constituent of the Amazon e-books environment. They compete with them for customers and other users of their services. They need to strategize how to out-compete their competitors and win the larger portion of the market segment. To be able to do this, they have to strategize and evaluate the strategies being used by other e-book providers to enable them come up with efficient ways to out-compete them. This is how the competitors become relevant to this SBU. Examples of such competitors include e-bay, anwers.com and wikipedia among others. The customers are very relevant to Amazon e-books since they keep it on operation. Customers are delicate thus need to handle with care due to their relevance as users of the products or services. They are the most targeted constituents of the environment. A good example is that they pay for services provided to them and from this pay; the Amazon e-books gets returns on its investment. The other environment constituent of relevance to Amazon e-books is the public as well as the intermediaries. The intermediaries are the internet providers. Amazon uses them to provide their services to internet users. They have to be in good terms with Amazon to offer their services to the customers effectively. This is relevant because this intermediaries offer their services to many business units including the competitors of Amazon thus failure to be in terms with them will give chance for the competitors to flourish. Amazon needs to create a good public image so that internet users may choose to use its e-book services. The public is relevant since it is capable of either tarnishing or building the name of the business unit. Considering the macro environment, the most relevant constituent is technology. For Amazon to be able to reach its customers it needs advanced technology and continual improvement since technology is a changing factor that can be used by competitors to grab customers. Therefore technology is very relevant and need to be updated for users or customer convenience. Economic factors also affect Amazon but this is seasonal and varies from region to region. Tutorial three Swot analysis summary for Amazon e-book strengths Amazon as an e-book service provider has very many strengths. The first one is that it is preferred than its competitors in terms of information accessibility. Users get to reach the information they want easily at a cheaper price when using the service. It has a stable database that enables quick access to a variety of books and other information as compared to its competitors. Amazon e-book has diversified its services to customers and other internet users. The database containing the books in soft copies is well updated and contains a wide variety of books across all the fields and professions and the system is regularly updated to include even the recently published books thus preferred by many internet users and customers. It has established its name and is widely known that any other e-book business unit thus many people go for it and this contributes to its outstanding performance. Its systems are user friendly and provide information hat guide the new users on how to get the information of the content of the book that they require thus preferred by new users. weaknesses Weaknesses involve factors that restrain the good performance of the business unit. Amazon as a service provider has got several weakness that hinder its performance in one or several ways. One of its weaknesses is that it has got high charges for its services compared to upcoming e-book providers and this turns off some of the customers and new users who are unable to pay for such charges. Another weakness is in terms of registration procedure. There are a lot of conditions required to me met before one is fully registered as a user and this pisses of most internet users. Other upcoming e-book providers make use of this weakness to offer a free registration with a short registration procedure. opportunities This involves a situation probably in the environment that will promote the good performance when efficiently and effectively utilized by the business unit. Amazon has got one great opportunity and this includes technology. Many scholars today do their research on internet and very few people go the library physically. They search all the information they need using internet. This is a great opportunity for Amazon to grab customers and make much profit from its services only if it will efficiently review its database to offer the best in the market. threats The main threat that Amazon faces is the emerging e-book service providers. They have to efficiently improve their performance and services to avoid loosing customers. Objectives resulting from swot analysis To grab, grow and sustain number one market share in the e-book service industry. To grow into a customer focused business unit. To enhance quality of its services with a price advantage. To meet most of the users requirements by regularly updating the service providing database with current books. Tutorial four In the context of marketing strategy, a product’s portfolio just like the SBU portfolio or mix will serve the purpose of ensuring that it performs well both presently and in future. Product portfolio will embrace good performance of the product after its introduction to the market as well as when other similar products emerge in the market sometime after it has stayed in the market. A balanced portfolio has several advances as follows. A balanced portfolio of both the product and the strategic business unit means that proper analysis on the current attractiveness of the product has been well analyzed and thus the product is likely to perform well at the time it will be introduced to the market. It also means that different levels of future potential of the product have sufficiently analyzed and there for the business expects good performance by the product some time after it has stayed in the market. A well balanced product portfolio means that each product has its role well defined and therefore the organization will be able to strategize quickly areas that need change without affecting other products. A balanced product portfolio enables the business unit to develop strategies for business change as well as improvement by planning for tomorrow while making decisions today and this calla for proper definition of each product’s role both currently and in future. Approximation of relative market share and growth rate in the absence of accurate sales data Since we live in an imperfect world where in some cases the business organization or unit may not be able to access the accurate sales data of its competitors, in such cases the business unit can employ the following strategies to approximate the relative market share and the growth rate of its competitors in such a situation. Since the sales data represents the total consumption of customers in the market, the market share of competitors can be approximated by calculating the total market consumption which is the total market share. Having found the total market share, subtract your own market share and the remaining will be an approximation of competitor’s market share. To get specific market share in absence of sales data, approximation statistics are one and this involves research tools like sampling. The growth rates of competitors are approximated from the market share values obtained. The higher the market share compared to what was previously recorded, the higher the growth rate. Tutorial five Although experience curves and profit impact of marketing strategies models tend to show that business units with a growing market share is likely to emerge the winner in terms of performance, this does not imply that a company with low market share has no way of running a profitable business. Profits and losses are calculated on basis of return on investments and this means what the company gets on top or below what it put in during the start of the business activity. Market share only means the market portion occupied or being served by a company and although has a link with profits, it does not necessarily means that firms with high market shares have to make profits always. All depends on the inputs and the outputs obtained. This means that there is a possibility that a firm with low market share can plan well and effectively use its scarce resources to achieve a low cost of production to serve its small market share and at the end make huge profits from the small sales compared to a company with a bigger market share that might have wasted a lot of resources on production. Therefore, we learn that although market share directly links to profits, it is actually the production strategy and allocation of scarce production resources that will determine the profits made. Quality is one of the major factors that are discussed when analyzing the outcomes of business performance using PIMS model. There is a very strong link between business performance and the quality as a factor of production in a business. When a business organization produces quality products that are consistent and meets the requirements of both the customers and the quality regulatory bodies compared to those produced by the competitors then that business organization is likely to attract many customers who value quality. Once many customers are attracted to the good quality product, the firm can strategize to increase prices and make profits with a quality advantage and this improves the performance of the business. The opposite might happen if the company shifts to production of low quality products or offering of low quality services to the customers or failure to meet the requirements of the quality regulatory bodies. There are few instances where a low quality producer can still be profitable and this happens mostly in cases where the customers or the market has no competition. This means that the producing company has no competitors and it is enjoying the monopoly. The customers have no choice other than buying their products at a given price without considering the quality. The product might also be basic or a vital requirement with no substitutes. The customers here have again no choice but rather buy the product despite low quality. Tutorial six There are several circumstances that might make a business unit change its scope of market. A company may change to single market scope or strategy when it has limited resources of production, also when it aims at minimizing competition and when it needs to focus on niche marketing. This means that the company has discovered that it can better satisfy the needs of its target market because it understands how to do this better than any competitor e.g. competitive advantage through being closer to market and also ease of making changes and responding to environment. A company can choose to change to a multi market scope or strategy in circumstances of need to diversify risks, need for more growth potential, need for overall high profits, need to strengthen the brand, image and positioning, need for segments with high strategic fit and need to benefit from economies of scale. A company can also choose to change to total market scope or strategy in circumstances of need to lessen competition through erecting barriers to entry, need for higher potential for growth, increased profits, market share and need to increase power in the market. There are several pros and cons of being first in the market and they include the following. The first advantage of being first in the market is that there is less or no competition and customers have no choices in terms of competitor products therefore the firm can price highly to generate back its investments and make profits before tother similar products emerge in the market. After that, they can then change strategy once competition sets in by lowering prices or repositioning of the product. Another advantage is that the firm has an opportunity to establish its brand before other brands of the same product emerges in the field. This will prolong the lifecycle of the product a lot when competition sets in. However there are also the cons or the disadvantages of being first in the market. To be first in the market requires that you have to follow all the procedures and protocols of introducing the new product to the market. Some of these protocols are costly and the firm might likely run a loss if not very careful. The rules and regulations in terms of operations, quality, safety and other factors are strictly monitored and this might mean high cost of production with no profits. The target market might also be reluctant in acceptance of the product. Once the product faces acceptance challenge, there is no enough time to make profits before competitors emerge and this can lead to early product death. Tutorial seven Most companies offer different brands in the same product line when its existing brand faces stiff competition from the competitors. The company thus decides to increase the number of brands within the same product line to maximize overall sales and profits earned by SBU’s products. This practice is what it termed as product overlap strategy or multiple product scope. It is mostly practiced by advanced firms in terms of market share, managements as well as scale of production. There is also better market coverage attainment by the company thus increase in sales volume. Cannibalism can be avoided by careful planning by the company on how to market this many brands of products and services. The best strategy is to ensure that the two or more brands of same product have different or are marketed to serve different market segments and this will prevent cannibalism. Another strategy to address cannibalism is by dividing the entire market into separate categories in terms of scale, age, sex, direction or location among many other subdivisions. This is mainly to avoid self competition of the brands of the same company within the market segment. Each and every brand thus must serve a separate target market share. This means that the brands will not each into each other as the name cannibalism can be literally interpreted. The best example of a product in the supermarket that has been repositioned amongst existing customers is the music players from Sony. Apart from playing tapes and discs, it has technologically been advanced and can now read and play music saved as data in the USB disk. Initially, these players were very expensive but with many upcoming companies, they have reduced their prices as a repositioning strategy and now many new users are acquiring these players at an affordable price. This is repositioning for new users. Sony has now applied its experience to come up with players that play and also record music and this is suitable for artists who wish to listen and at the same time record their music as they produce. This is called repositioning for new uses. Bibliography CBS SM 310 Bentley Lecture 2- 8, S2 2010 Michael Edward. 1995. Strategic marketing: creating and sustaining superior performance. Clifornia: Free press. Read More