Strategic Marketing Plans as a Continual and Systematic Process for Developing Effective Marketing - Term Paper Example

Strategic Marketing Plan 11 Name: Student Number: Unit: Unit Coordinator: Word Count: (3500 words) Executive summary A company has to switch from value retailer to a customer – driven, streamlined organization for the purpose of setting itself apart from its competitors. Toys have changed children’s lifestyle of late, how children present and develop themselves. This business will present toy products that are valuable, of quality and convenient. This venture of toys production remains to be fully exploited and this presents this company with an advantage of penetrating the market before there is influx of entrepreneurs. This strategic marketing plan presents such a way of penetrating the new markets and acquiring a big market share as possible. Table of Contents Table of Contents 2 Introduction 3 1.0 Product lifecycle 4 1.1 Introductory stage 5 1.2 Growth stage 5 1.3 Shakeout stage 6 1.4 Mature stage 6 1.5 Decline stage 6 2.0 New market entry 6 2.1 Cost reduction 7 2.2 Repositioning 7 3.0 Pioneer Strategies 7 4.0 Strategic marketing programs for pioneers 8 4.1 Mass-market penetration 8 4.2 Niche penetration 9 5.0 Growth-market for market leaders 9 5.1 Market Expansion Strategy 9 5.2 Fortress Strategy 10 6.0 Strategic Implications of Product Life Cycle Stages 10 6.1 Shakeout Stage 10 6.2 Maturity Stage 10 6.3 Decline Stage 11 7.0 Strategies to serve new economy markets 11 7.1 Emergence of Digital Product and Internet 11 7.2 Syndication 12 8.0 Appropriateness of designing organizational structures and marketing plans 13 8.1 Organizational structures 13 8.2 Marketing plans 14 9.0 Critical role of marketing metrics and marketing audit 16 9.1Marketing metrics 16 9.2 Marketing audit 16 10.0 Conclusions 18 11.0 References 19 Introduction Cooper (2000) explains that if an organization is to achieve marketing objectives, it has to consistently plan its activities in a conspicuous way more so in the current dynamic environment where the competitors and customers behavior keeps on changing (change constantly). Strategic marketing plan is a tool that details interconnected logical step by step processes and systematic way for achieving marketing goals. Strategy is the perception of where the company desires to be and consequently making a decision on how to get there. This provide for the long term structure for marketing organization for the company. There is increased demand for children toys and in this regard, a comprehensive strategic marketing plan for toys is very important for this business. In addition, the dramatic changes in production of toys are happening quite often and therefore the marketing strategies adopted must be effective. This report analysis the external and internal environment, market competition and specifies the required action plans for attaining marketing goals in an effective and efficient manner. This strategic marketing plan also addresses what the company needs to do in order to compete in the market competitively and place itself above the competitors. The company will be involved in production and sale of toys. This has been singled out as there is a huge market for toys and children require things to play around with. This will keep them busy and aid them identify dreams at lower age as Jadva et al (2010) and Guyton (2011) observes. Different materials, shapes, colour and sizes will be used to make the toys. These toys will then sold to families, schools, religious institutions and other learning institutions as Sobel & Corriveau (2012) notes. This provides diverse markets for the toys. 1.0 Product lifecycle A product lifecycle (PLC) is a concept in marketing used to plan the lifespan of a product, and to describe the stages a new product in the market go through, starting from the time it was thought of till it gets out of the market. Bartlett and Twineham (2013), in their study explain that, products go through four series of lifecycle which include; introductory stage, Growth stage, shakeout stage, Mature and decline stage. 1.1 Introductory stage According to Komninos (2002), introductory stage involves researches, developing of the new product and launching. They assert that this is a very important but tricky stage as the purchase of a new product is limited due unawareness of the product by many members of the target market. Public awareness is very essential to the success of a product in that people tend to buy any product that is familiar to them. Bartlett and Twineham (2013) explain that a pioneer/follower can use two different strategies to introduce their new product to the customers. One can use either a penetration strategy or skimming strategy. Penetration strategy enables the organization to attempt for quick market development by initially setting the price of the product very high and slowly lowering it overtime. Skimming strategy obtain as much per unit enabling the firm to recover the investment of its new product quickly. This is obtained by lowering the product price and raises it later gradually. 1.2 Growth stage During this stage, the product and the sales start to increase as members of the target market has accepted the product. Tibben-Lembke (2002) explains that on growth stage, the company incurs a lot of cost on advertisement and developing the product. 1.3 Shakeout stage In this stage, the price of the products is cut down causing the overall growth rate to drop. Firm concentrate on creative promotional pricing to win new customers and maintain the existing ones. Focus on strengthening all firms’ channels relationships is emphasized. A lot of effort is made in maintaining and improving all distribution systems. Promotion cost increases as the firm concentrates much on promotions and offers to customers. 1.4 Mature stage In this stage, the sales are near their highest, but then start to stabilize gradually due to increase in competition. The trick to survive in this mature stage is by differentiating your product from similar products offered by competitors. 1.5 Decline stage In the decline stage, sales start to go down as the product gets to it saturation point. Many firms withdraw their products from the market or they either cut down the prices to increase their sales. The toy product in this discussion is in introductory stage as it’s just about to be introduced to the market. Researches, development and launching of this product is on the process. 2.0 New market entry New market entry is a revolving point in any company’s lifespan. Many companies enter to a new market with the aim of expanding. Zahra, Ireland and (2000) assert that, once a new market is penetrated, the sale of new goods and services will increase thus increasing firm’s revenue. New pioneers are able to take advantage of gaps in the offering of the older pioneers or find creative ways to market the produce. According to Zahra et al, (2000), for a firm to get into a new market it requires some basic plans which includes 2.1 Cost reduction Reducing price allows the penetration on current market. Products introduced in the market at a lower price than pioneer’s latecomer is able to attract more new customer who could not have bought such product as result expanding the total market. Cost reduction strategy may also reduce the margin for new pioneer compared with other competitors in the market, unless its cost of production is relatively low. 2.2 Repositioning Developing new channel of distribution helps in accessing new markets or develops a better platform to penetrate existing ones. Concentrating on the existing markets and developing a good understanding of firm’s environment can reduce risks and produce quick success as stated by (Doherty 2000). This can be achieved by repositioning the product through advertisement, marketing and quality packaging. 3.0 Pioneer Strategies According to Covin, Slevin and Heeley (2000), although pioneers take the greatest risks and experience more failure than followers, they have advantages inherent which can take them from introductory stage of the product life cycle through the growth to maturity stage. Some of these competitive advantages are that, they have an advantage of first choice of market segments and positions as they are able to develop a product offering with qualities that fits a large segment of members of targeted market. This becomes a headache to the followers as it becomes hard to convince their customers that their products are of quality to the older .Robinson and Chiang (2002) assert that unlike followers, pioneers are the ones who define the rule of the game through their actions on key attributes of the product such as product quality, price, distribution, postsale services, warranties and budget set standard that competitors must meet. Pioneers also enjoy the economies of scale and experience. By the fact that they are the first, the pioneer’s gains amass of experience and volume and therefore they can enjoy benefits of lower per unit cost greatly than followers. 4.0 Strategic marketing programs for pioneers 4.1 Mass-market penetration Mass-market penetration strategy is best strategic marketing programs for toy product pioneers. The main objective of this strategy is to capture and maintain dominion of the total market for the new product. The greatest and important marketing task is to convince as many penitential customers as possible to take up on the pioneer’s new product. 4.2 Niche penetration The pioneer will concentrates on toy product as a single market segment thus enabling. The strategy is the best to apply when the quick growth of a new market is expected, thus making an appropriate strategy for this new market product (Toy) as explained by (Shaheen, 2001). 5.0 Growth-market for market leaders Rodrik (2005) describes a pioneer to be an early share leader in the new market. As competitors gets in to the market, the pioneer need to do some adjustments in strategies to ensure that it maintains its leading share position. Hiller (2000) explains that as new product-market gets into growth stage of its life cycle, the competitor with the highest market share is always the pioneer. This growth strategic objective helps in maintaining its leading share position in the presence of rising rivals as the market inflates. For a firm to maintain its current and leading share position in a growing market, it must ensure that the growth of its sales volume continues at rates equivalent to that of the overall market. This enables the company to remain in absolute market share. To achieve this, the market leader may apply some continuous strategies such as market expansion and fortress strategy among others. 5.1 Market Expansion Strategy With this strategy, the market leader will concentrate on defending its virtual market share by increasing a number of new market segments. Rodrik (2005) describes the main objective of market expansion strategy is to obtain a large share of new members of the target market who may prefer a different thing from the company’s initial offer. He states that leaders can successfully implement this strategy through developing line extensions, alternative product and new brands to appeal to multiple market segments 5.2 Fortress Strategy A strongly held current position can be consistently be strengthened by fortress strategy. This strategy is termed as part of a leader’s share-maintenance efforts as explained by Hiller (2000). A firm may use an already strong position to improve the satisfactory of existing customers while working on improving of its offering to new customer. 6.0 Strategic Implications of Product Life Cycle Stages 6.1 Shakeout Stage During this stage, the overall growth rate decline occur which contributes to price cuts. Changes in market’s competitive structure occur, thus leaving the firm with the only choice to eliminate weaker items. Creative promotional pricing and offers are emphasized in this stage thus increasing promotion cost. The firm focuses much on strengthening channels relationships by making effort on maintaining and enhancing its distribution system. Many companies settle on dominant design during this stage as economies of scales are achieved. Small marketers in this stage tend to exit altogether as barrier to entry becomes very high and as the occurrence of large scale consolidation take place. 6.2 Maturity Stage In this stage, the prices and profits will range from low to moderate levels. There is slower sale growth as there are many competitors entering the market thus cause an intense competition, leading to fight for market share as explained by Robinson and Chiang (2002). During this stage, the level of capacity utilization shoots up , creating a platform for high profit to those with high market share. This make the cash flow to be relatively strongly positive as weaker competitors look their way out of the market. During this maturity stage, the pioneers tend to differentiate their products from familiar ones with their rivals and make improvements on the new product. Pioneer focuses much on advertising so as to attract new users. Repositioning is carried out on this stage where new channels of distribution are added to face the stiff competition and promotions are offered to retailers. Monitor market changes as market shares increases. 6.3 Decline Stage During this stage, sale volume decline drastically recording a negative sale growth as competition becomes too strong for the firm, recording lower profits. Pioneer chooses to maintain the product, reduce prices and looking for new uses of the product. Challenges in production/distribution continue to increase in this stage and therefore, no increase in sales. In this stage, price remains stable if the rate of decline is slow. Pioneers focuses on distribution as marketing activity. There is change in technology, fashion and product outgrows its value. 7.0 Strategies to serve new economy markets 7.1 Emergence of Digital Product and Internet Emergency of digital product and internet has shown a great relationship with new economy markets. The use of internet and digital products has the ability to combining business-to-business and business to customers. According to Quah (2003), the digital product chain is described as creation, delivery and consumption of digital content. Apart from eliminating the intermediaries, internet is a very powerful commercial tool in new economy markets as they lower transaction costs. This lower transaction costs enables new pioneers to get into a new kind of transactions which guide to new market segments, thus making the marketing environment more complex. Digital products and internet reduces the cost of distribution in the new economy market. 7.2 Syndication This company has the benefits syndication; this is the selling of one product (toys) to so many customers. The customers later combine this with other sources information and distribute it to other agents who help in marketing. Syndication will help this company to disburse informational goods on top of the tangible products as Teece (2003) state. It is possible to automate the process of syndication thereby enabling syndicated networks to be expanded, created, and have flexibility; this makes it quicker in the physical world. Syndication would as well increase the company returns in the range of the network products. The toys, as Akkermans (2001) quips, would become valuable and important as the number of those who use the toys increases; this would be brought by traits of the informational networks. The company will identify and take advantage of opportunities where it will benefit from increasing its returns to scale from positive networks it will have created; this would help it to grow more quickly in the relative environment. Restructuring and disintermediation of its marketing channels would help the company to reach its customers directly rather than using intermediaries as Jallat et al.,(2001) maintains. In essence, this would help it to cut expenses and complications of distribution channels. However this should not be done lightly because of customer preference, some distributors have strong relations with customers. Restructuring and disintermediation will help this company to know the directions on which their customers are following, the intermediaries do not reveal all information making the company to have some wrong information of the market from the distributors and other intermediaries. 8.0 Appropriateness of designing organizational structures and marketing plans Organizational structures and marketing plans are core components of designing a successful marketing plan. They help in implementing of strategic strategies which are different. 8.1 Organizational structures Gold et al., (2001) affirm that organizational structures areparticularly important for controlling operations, motivating employees and showing the flow of activities in the company. This is used in marketing by dividing the markets in to various forms like geographic area, by customer and processes. Organizational structure will make accountability to be clear in the company. Every personnel would be held responsible for the levels of profits and sales obtained. Besides, as Pfeffer (2009) notes, it would help in creating opportunities for career development for the company personnel. It will as well help to control situations and will lead to competitive course in the company. The type of organizational structure that best serves this company of making toys is functional organizational structure.  The company does not have any other products that it’s producing and it’s not a big business (multinational). The company will portion each department according to their purposes, in this regard, the company will have sales department, marketing department, accounting department and the production department. These departments would rely heavily on the knowledge, talent and expertise of the employees to support it. Coordination and communication would be improved by having a clear communication line and facilitation networks within the organization. This structure will make it to be efficient and provide a clear hierarchy of functions and people. In addition, it will enable by creating room for specialization and easy accountability for work. Since employees will be placed in their specialist departments, they will be efficient and high acceleration of speed of work and elimination of duplication of work as Sosa et al., (2004) states. With this structure for this company, the functions would have equal importance. 8.2 Marketing plans They serve as written guidelines for the company to follow in marketing the toys. It will also help the company to be proactively involved in the sales success as notes Cohen (2005). It aligns the strategies and this makes implementation of the same easy and achievable. Marketing plans would as well integrate the competitive strategies. They integrate the whole businesses of the company. They play an important role in forecasting function as they would require estimate sales from the marketing efforts. McDonald et al., (2011) explain that marketing plans will make clear the important elements of marketing and gives out the objectives, directions and the activities to be done by the employees for the business. It will bring out the broader point of view outlined in the objectives. Since it relates to the product, it directs on how to promote, distribute, price and develop the product (toys). In addition to this, McDonald (2007) adds that it will help the company to identify some competitive forces and act accordingly. By planning itself, the company will have an organized approach of approaching the market; it spells the actions for the market. This overcomes the barriers of failing to plan. 9.0 Critical role of marketing metrics and marketing audit 9.1Marketing metrics They show how to define the markets. However, they don’t measure the marketing efforts. Incremental sales are one of the marketing metrics that define the markets. Incremental sales are closely related to return on investment, it measures the marketing efforts contributions in relative to the sales as Cooper (2000) points out. In this regards, it is very important for the marketing department to monitor how the marketing campaigns are fairing in terms of effectiveness. As Ambler et al., (2004) explain, they will help measure and evaluate each win, lead and failures that are resulting from the marketing campaigns. The company has established the baseline sales and has clearly defined the channels of the marketing efforts that are in effect. This will enable the company to increase the sales period after period. This is concurring with the smart objective of increasing the profits of the company to $500,000 within the next five years. 9.2 Marketing audit The increasing complexity of the present market environment requires a more systematic process of evaluation of the marketing performance in order to deal with the market dynamics as Taghian & Shaw (2008) notes. Marketing audit is a comprehensive and important assessment of all areas of marketing activities in the company. It will also deal with systematic assessment of the plans, strategies, objectives, the company structure and the marketing staff. Marketing audits will help in comprehending the working of different areas of the company and the respective contribution of those areas to the whole system which is channeled towards the achieving company's overall objective. Moreover, marketing audits brings out the inefficiencies that the marketing team didn’t know that they existed by uncovering them as Taghian & Shaw (2008) continues to explain. The current marketing strategy will help in uncovering the inefficiencies that will be avoided in the next round of marketing. This is important as it will help avoid making same mistakes repeatedly. As a result, the marketing campaigns are recharged and a new direction and strategy is put forward, this creativity defines and changes the marketing process. After identifying and analyzing the weaknesses, the marketing team will come up with new ways to per sue the company goals, in essence, the marketing audits will help in exploring new ways of achieving the same goals for the company as the marketing process proceeds. This being the assessment of the approach, aims, activities, and results achieved by the company in marketing of toys, it would enhance the effectiveness of making sales by the company. It is a crucial part of planning the marketing process and reviewing the marketing plans themselves (whether they are effective or not). Marketing audit will permit the marketing chiefs to make some alterations to the marketing plans if they are necessary, will also clarify threats and opportunities. It considers the internal and external environment of marketing. This is very important for marketing of toys as there is some information that would be important for marketing process. This as well will help in evaluating what has worked and which hasn’t for the marketing and overall for the sales. On top of this, marketing audit would help in revisiting the initial goals that are important in introducing the company's marketing campaigns in market of toys.   10.0 Conclusions Strategic marketing plans are a continual and systematic process for developing effective marketing processes for this company. This began by clarifying the focus and purpose of the plans, analyzing the present environment and situations, identifying the target customers, establishing smart objectives and designing a strategic marketing plan for a holistic approach for the company. The relevance of business cycle, new market entry and roles of marketing plans and marketing metrics have been discussed. This report provides a good strategy for marketing of toys.         11.0 References Akkermans, H., (2001), Intelligent E-business: from Technology to Value, Intelligent Systems, IEEE. Ambler, T., Kokkinaki, F., & Puntoni, S, (2004), assessing marketing performance: reasons for metrics selection, Journal of Marketing Management. Bartlett, D., & Twineham, J., (2013), Product Life Cycle. In Encyclopedia of Corporate Social Responsibility (pp. 1914-1920), Springer Berlin Heidelberg. Baumann, H., & Tillman, A., (2004),The Hitch Hiker's Guide to LCA. An orientation in life cycle assessment methodology and application. 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