Strategic Marketing: Pioneer Company - Assignment Example

Strategic Marketing Assignment Question1 In today’s market environment, the question of whether a business should adopt a pioneer or follower strategy is an important aspect. This is because of the uncertainty in the market occasioned by the fast changing information.Both strategies have inherent risks as well as opportunities and should be carefully analyzed before a decision is made. Another issue is that the timing of entry into a market is of utmost importance. It enables a firm to enter a market and consolidates its market share before the market matures. Those who arrive late may find it hard to penetrate such a market. A pioneer is one a business that is first to enter a given market or establish itself in a given business line.It does this by entering a new market or by developing a new technology which leads to the production of a newer product. A pioneer usually seeks to reap benefits by creating demand for the newer products and ensuring that it continuously meet demand before competitors enter that market.This can be achieved through advertising campaigns,initiating price changes like lowering prices to make people test the product or even adopting distribution techniques that ensures it reaches the target market. Pioneers who are introducing a new technology in the market should ensure that they are successful in commercializing that technology. Continuous improvement on technology will ensure that quality products are produced and that consumers can develop a bond with the company’s products. Suarez and Lanzolla (2005) warn that maintaining market leadership in the face of entry of competitors in such a market is not always possible especially if commercialization is not properly done. Other companies have always attained commercialization through creative advertisement, which makes the consumer feels that they are buying a higher quality product. Followers can also achieve successful commercialization of technology and even defeat the pioneers in the race for market share. For example, Seiko, manufacturers of quartz watches have attained this feat (Mittal and Swami, 2004). Followers can also focus in areas on market niches that gives the best returns.This is because taking market share from the pioneer may not be possible. Pioneers may have established themselves well within certain areas, having been around for quite a while. Hence, choice of which segments to serve becomes useful. Otherwise, they may end up being forced to exit soon after their entry: for lack of enough market shares to sustain their cost. Strategic advertising and the distribution of the products should also be analyzed carefully by the followers. To make themselves known to the potential customers, strong promotion should be adopted so that the firm can stand out of the competitors, and attract the interest of the customers. As a follower, the business should as much as possible desist from possible confrontation with the pioneer and focus on consolidating its gains within the market. This will ensure that it has the time and space to grow inside the very market. Stewart and O’Brien (2005),is also of the opinion that followers should invest in research and development but such should be focused in areas that promise much returns in the business.This is an advantage they have over pioneers. By studying their pioneers, they are able to easily identify some of these areas. Pioneer should also be keen to maximize the number of customers adopting the firm’s newer products. This will enable the firm to quickly break even and be on the road to profitability. If the firm cannot get the people to buy out products, the costs will not be covered leading to losses, and maybe a humiliating exit. Some of the strategies that can be employed to achieve this include aggressive product awareness campaigns to motivate people to buy hence making the first buys and subsequent repeat buys. This should focus on a broad cross section of customers. Another factor here is that the pioneers should make it easy for customers to access the products. This, therefore, means that the choice of the distribution channels should be chosen carefully. Whenever it is made possible for customers to easily access the product, they are likely to try the product by way of repeat buys and hence with time, they can be loyal customers of a firm’s products. Another strategy may include market skimming. This involves the business charging prices that guarantee maximum profits before competitors can enter the market and try to force prices down. Promotional programmes targeting those customers that are least sensitive to price can help to achieve this target. Question 2 Growth Market Strategies for Leaders As a market leader, a business can adopt a number of growth strategies so as to maintain its market share.There is always a danger that the competitors might become more aggressive and take substantial portion of the leaders’ market share. It is, therefore, in order that the leader takes appropriate action to keep them at bay. One of the growth strategies is the fortress defense strategy otherwise called a position defense strategy.Here, the focus is to continuallystrengthen its position and make sure its position is safe from any kind of threat from the competition. Actions should be taken to encourage repeat purchasing and improve customer satisfaction. Loyalty programmes can be introduced where customers are rewarded for purchasing a firm’s products with introduction of smart-points that can later be redeemed. Another strategy to maintain market share that can be adopted by the business leader is Market Expansion. Here, the leader can develop newer brands utilizing similar technologies so as to keep cost low, and appeal to multiple market segments.For example, if the products of the business are affordable to the ,more affluent in the society, the business can also start offering brands that target the middle class.This way,it will be expanding the market. Another example is to target the customers based on their age groups. In most countries the youth form a huge percentage of the population.Hence, if the business products are not popular with the youth, a specific brand can be produced to specifically target them, and lock that segment from competition. Confrontation strategy can also be applied.Here, the business does not seek to differentiate itself from the competition, but it seeks to outdo the competition in marketing and other promotional programmes. This will only succeed if the business has more resources to fund advertisements and the distribution network is reliable. If done earlier before the competitor establishes themselves within the market, it may as well push them out completely. There is always a possibility that the competitors might seek to avoid direct confrontation and aim at attacking those segments where the leader is weak. Once established, the competitor may then seek to attack areas where the leader is considered to be well established. The business can adopt a flanker strategy whereby it introduces products, in its weak areas, to directly compete with the competitors. It then can use its brand name to market itself, and get a head start in that segment. Share Growth Strategies for Followers As a follower in the market, there are a variety of growth strategies that can be adopted. The most important thing is to study the leaders and get to know both the weak and strong points. This is because early on, a direct confrontation may not be wise, especially given that the follower is not well established within the market. One of the strategies that can be applied is the frontal attack strategy whereby the follower aims at capturing the segments that are underserved by the market leader.This strategy is likely to succeed whereas existing customers do not have any strong brand preferences and therefore, easily be swayed to try a newer product, something that can lead to repeat buys. Another strategy is the leapfrog strategy.Here, the business aims at achieving either repeat of replacement buys from the competitor’s current customers. This is because the business has managed to creatively differentiate its offering from the products that the competition is offering. It gives the customers attractive benefits than what they are getting from the competitor. Besides, improvement in technology can really boost the follower chances in the event a more sophisticated product is offered to the customers. In the case that the business has, in its operations, product that fully satisfies the need of customers, creating a situation whereby several segments are not fully served the follower can adopt frontal and encirclement strategy. Here, the focus is on simultaneously offering products to different segments, which are not properly served by the main players in the markets (Kotler, 1994). Each of these segments thus gets product that is fully tailored to meet its needs. Question 3 In a transition or stakeout market, a business can seek to achieve customer satisfaction and loyalty by doing a number of things. One of these strategies is to differentiate itself from the competition so that the customers can easily identify with the business. The business should also be on the look out to take advantage of any improvement within market conditions. There is a likelihood of the transition period being caused by economic factors, which will soon improve. For example, recessionary periods in some industries are relatively short lived, perhaps going into a couple of years. For such a case, the business should be ready to capitalize on any market improvements or change in competitive situations. The business can also divest especially if there are no signs of improvements or if all signs shows that the conditions may worsen. However, the timing of when a firm can opt to divest is very important. This is because if it is done too late, little or no buyers may show up and the business would have lost its investments holistically. In a mature market, huge volumes of sales are repeat buys or replacement purchases rather than newer buys. The focus of any competitor in such a market is to retain the customers; losing customers in such a market is very expensive. It is, therefore, important to ensure that customers are continually satisfied with your products and become loyal to them. One strategy the firm can adopt in order to survive in this market is to maintain its cost as low as possible through proper procurement policies which does not lead to a lot of costs. Production process should also be improved in order to reduce possible imminent wastage. Another possibility associated with this phenomenon, is to aggressively market the business in the hope of dislodging weak competitors and taking over their market shares. This is a delicate move and should be done whenever the business feels sure of success. Otherwise, it may end up incurring costs and achieving nothing in return. Besides, the business can start promoting alternative uses of their products to strengthen the market share. Question 4 Most of the businesses today are ever thinking of ways in which they can improve on their online presences. The reason for this shift is because many business transactions today can be done within any online environment, and it is within such an environment that even most customers visit to make enquires. A strong online presence, therefore, means that a firm can increase the visibility it focuses onto its current and potential customers. Besides,conducting business in an online environment has the benefit of cutting down on cost and improving profitability. Another advantage is that the online business environment opens up countless business opportunities to the business. It is, therefore, expected that firms will be continuously exploring how they can move on to conduct part of, if not, all their business transactions within such a paperless environment. Syndication; Some of the strategies that can be employed here include syndication.This basically means that the firm can sell its product mainly information based to very many buyers over the internet. Those purchasers then can combine such a product with information from other sources before conducting any distribution activities. Customers can be served with minimum increase in cost to the organization.Again, the business can create a network which it can easily expand and adapt to the changing needs of the market at with much ease as compared to if it were dealing with physical structures. However, it is normally difficult to control such information once given out. Matters touching on copyright issues cannot be controlled given that such people may be spread across many countries or even towns. Making a follow up to see how they are handling the business information is absolutely challenging in that matter. Increasing Returns to Scale Of Network Products This is a relatively new concept within the online environment. It holds that as the number of users of a product increase then the product becomes more valuable. Some organizations, aiming for a big impact, may sometimes give out their products for free to make more people access and use their products to achieve this effect. Alternatively, a business can take its campaign to social networking sites such as Facebook and Twitter where it will interact directly with the current and potential customers and discuss its products. Out of such a discussion, then and more people may be tempted to try the product and even information may spread by word of mouth as people persuade their families and friends to try the newer product. The main advantage here is that the effect of this may lead to an exponential growth of the business sales volumes out of modest investment. Personalization and Customization; Personalization is the attempt of the marketer to personalize the message being sent out to each and every customer. Unlike in instances where a common message is sent to all people in your network, here, the business needs to pay attention to the unique situation of an individual and the message seeks to satisfy that unique situation.A good example is when an organization sends its customers birthday messages. Some of the unique details include name of the customer.You cannot wish somebody a happy birthday and fail to write his or name in the massage sent out. This may even offend the recipient. You must know his or her real name. On the other hand, customization refers to a situation whereby the user themselves specify what they want the business to offer to them. Therefore, the product it is selling should conform to the various customer’s tastes and preferences. Of course, customers have esteem needs and meeting and even exceeding their demands may earn the business their loyalty. They may even be willing to pay premium prices. Disintermediation and Restructuring of Distribution Channels; Dis-intermediation means that the company decides to do away with its distributors and thus, sell directly to the customers. This aims at cutting down the expenses it incurs in the course of distributing its products through its distinctive channels of distribution. The benefits realized can translate into increased profits. It is, however, important to mention that the middlemen’s function, that of getting the products to the customers, must still be met. Therefore, it means that even though the firm might be having its eye fixed on increased profit, it should be aware of the costs it might incur in the course of shipping these products to their respective customers. Disintermediation is a move that can lead to costs being saved and profitability being realized.However, it is also a move that may increase costs and lead to huge losses. Question 5 Having the best formulated marketing strategies is not an end in itself. Still, organizations must put in place measures to ensure that those strategies are achieved.One way of doing this is to have in place organizational structures and a marketing plan that supports the achievement of the marketing strategy. Marketing plan is an important aspect of the realization of the competitive strategy. This is because it points down to the direction in which all marketing activities should follow.Some of these activities may be carried out by people outside the marketing department, and it is important that they know what is expected of them. Coming up with a sound marketing plan means that they organization must be aware of the business environment within which it is operating; this means both the internal as well as the external environment.This information enables the business to be sure of what their target customers’ needs are, and to transform that information into products and services that can satisfy those needs. The organization is incurring cost in the production process and expects customers to buy its products and services. If production takes place and no one buys the products, or the sales are way below the target, then the objectives of the organization will not be achieved. Again, a plan should have room for changes so as to capture any changes within the customer’s consumption behavior. Customers are bound to change their purchasing preferences as newer developments come into the market such as entry of new competitors and new technological advancements.This means that the business should be able to note such changes and their likely impact way before they actually happen. Otherwise, the business might find itself grappling with a situation that may be threatening its very existence. A marketing plan should also be aware of the competition. The competitors’ strengths and weaknesses should be analyzed so that the business gets to know how best to counter the competition and either maintain its share or take away competitors customers. This will inform strategies such as how and when to advertise their respective products, which prices to charge, which channels to use to distribute the products and so forth. However, Guth and Macmillan (1986) notes that likely retaliation of the competitors following the firms move much is considered. Indeed, history is replete with stories of firms which blindly made a move against the competition, only for the competition retaliatory moves to drive them out of the market. The competitor’s future strategies and moves should be analyzed, with respect to a firm’s competitive strategy. If what the competition is planning to do is likely to disadvantage the business, then measures should be taken to counter the impact of such moves,and maintain the competitive advantage. If this is not done, the business might find itself being swept aside by the competition without notice. Competitors’ activities should be closely monitored in light of our business competitive strategies. It is out of the planning that a strategy can be developed.Good market planning, that takes into account all the activities within a business environment is thus important for the achievement of the competitive strategy. Poor market planning will lead to a strategy with inherent weaknesses and which may unravel at the implementation phase, by which time the firm may not have enough time to respond to newer market developments. The success of the strategy therefore, largely depends on the market planning. Another important aspect rests with the organization structure. Organization structure refers to how the authority-responsibility relationship is spread throughout the organization. It inform people on who is responsible for whom, and who is answerable to whom.This relationship affects how communication is passed from one person to another and determines the action of various individuals within the organization. Indeed, successful implementation of strategy to a large extend depend on the organizational structure. According to Cox and Paul (1996), organizational structure influences successful implementation of strategy and if a strategy changes without structure changing, then the structure of the organization will act as an impediment towards successful realization of the strategy. They (Cox and Paul, 1996), observe that the organization defines the structure, but if strategy changes, it means that there is a need to change what everyone does in the organization, and therefore, the organization structure must change. But having a structure is one thing; another thing is how to make that structure to work properly. This involves the management ensuring that they have a motivated team throughout all levels of the organizational management. This touches on a number of issues such as opportunities for promotion, employee benefits, job security and many more. Indeed, some analysts have observed that those who feel that their self-interest is compromised might engage in destructive behavior, which may compromise attainment of strategy. Guth and Macmillan (1986) observed that the extent to which individual managers will apply themselves to that attainment of a strategy largely depends upon their respective perception of how much their efforts will lead to the outcome they desire. If successful implementation of strategy might compromise their self-interest, then they may sabotage the whole process. Qi (2005) was of the opinion that success of a competitive strategy will depend on how much support the middle management get from the top management. For those areas where this support was available, the middle managers readily supported the strategy. Rapert, Velliquette & Garretson (2002) and Forman and Argenti (2005) observes that communication within the organization plays an important role in strategy implementation. If communication barriers exist such as wrong information is getting to the employees or the information never gets to them at all, then they may fail to appreciate the strategy and this will affect implementation efforts. Channels of communication should thus be clear and any barriers be done away with. The business should thus, ensure that communication from the top management to the employees pass through fewer layers. According to Schaap (2005) when there is possible structural deficiencies, the following problems may be experienced: First, there may be lower morale among employees because they have neither the autonomy nor the responsibility to execute duties falling within their offices. Second, poorly designed structures may also be a source of conflicts within the organization since there is no clear demarcation of roles and responsibilities causing immense levels of overlapping. These conflicts will definitely hinder implementation strategies. Third, there may be poor coordination among various departments since there might be confusion. Question 6 It goes without saying that any organization exists to make a profit.This is basically how marketing as a department can justify its existence within any given organization. This is because most the core objective of marketing department is to generate sales since it is the blood line of any business. According to Cohen (1995), marketing metrics is a way of holding marketing accountable and ensure that it is meeting its objectives. Otherwise, the marketer warns that marketing may miss most of its goals, and in the end it may not be adding value to the organistision. The challenge is now for the organization to determine which metrics should be used to accurately give a measure of marketing performance.How the metrics should be quantified is also an issue that should be decided upon as some measures to be considered are subjective in nature. Assigning figures to a concept that cannot be measured may end up painting a picture that may not be real in nature. Marketing metrics should be based on the sales, revenue and Return on Investments (ROI) targets which have been identified by the management, and as such, it should guide the organization towards its financial targets (Cohen, 1995).The reason, therefore, why the management may be keen on marketing metrics is to assure themselves that they are going to deliver on shareholders expectations. Those expectations cannot be met if marketing activities are not producing value. For example, if a business is not selling enough units, then profits may not be forthcoming. Marketing audit is another important factor as far as the performance of the marketing department is concerned.The main purpose of the marketing audit is to review various aspects of the marketing process as a whole, which includes the marketing environment, its system and specific marketing environment so that decisions can be made that will end up on improving performance of the marketing department as a whole. This review is important because the marketing environment keeps changing and as a result, newer threats and opportunities are bound to emerge (Kotler, 1976). The business must therefore, ensure that its operations are very much in line with this changes that take place from time to time. In case it is not aware of its market environment, then it might as well be swept aside by change. Brownlie (1996) observes that marketing audit should be comprehensive, independent and periodic so as to increase chances of early detection and awareness of existing and emerging marketing issues that may influence performance of the organization.Therefore, it is presumed that the use of marketing audit should influence performance. Areas of performance to be addressed include the financial performance of an organization, which has an impact on all activities of an organization as a whole. All departments need money to operate and this money should be generated through marketing. Management will also be taking a keen interest on the return in investment ratio of the organization to see if costs are being covered. The most important thing to remember is that the report that is produced out of the marketing audit process. The report cannot have any value in itself if it is not acted upon by the management. The management has to assimilate debate and develop their own understanding of the marketing audit and decide on appropriate marketing action. According to Clark, Abela and Ambler,(2006) the main purpose of marketing audit is to influence a change in the way different marketing activities are performed. This change is well needed because as opportunities and threats emerge out of the marketing environment, marketing activities should subsequently be positioned to take advantage of the situation or minimize and adverse effects that may come as a result.But, change sometimes is not that easy to achieve within organizations. Those people who are comfortable with the status quo will always resist. At times, people resist change for other reasons such as sabotage, fear of the unknown or ignorance. Hence, those leading change must be prepared to counter such resistance. One thing that should not escape our mind is that both the marketing audit and marketing metric activities go hand in hand.This is to say that the business cannot have a good marketing audit without an equally good marketing metrics. In fact, marketing audit should point to the business on why marketing metrics are not being achieved, how the problems to be tackled and any improvements required making business marketing activities more in line with its environment. For a smaller or medium enterprise entity, the best way to conduct marketing audit is by use of internal resources. Internal audit is cheaper than external audit whereby an organization is expected to deploy the use of external consultants. Besides, internal auditing is also advantageous because the employees entrusted by that responsibility understands the organization well and are likely to produce objective reports. References Brownlie, D. (1996), “Marketing Audits and Auditing: Diagnosis through Intervention,” Journal of Marketing Management, vol. 12 no.3, pg. 99–112 Clark, B., Abela A., and Ambler T. (2006), “An Information Processing Model of Marketing Performance Measurement,” Journal of Marketing Theory and Practice, 14 (3), 191–208 Cohen, W. A. (1995). The Marketing Plan. New York: John Wiley & Sons, Inc Cox R. and Paul B. (1996). Retail Management, 3rd ed. London: M&E Pitman Publishing Forman, J. and Argenti, P.A. (2005). How Corporate Communication Influences Strategy Implementation, Reputation and the Corporate Brand: An Exploratory Qualitative Study‟.Corporate Reputation Review, 8, 245-264 Guth, W.D., and Macmillan, I.C. (1986).Strategy Implementation Versus Middle Management Self-Interest‟.Strategic Management Journal, 7, 313-327 Kotler, P. (1976), Marketing Management Analysis, Planning, Implementation, and Control, 3rd ed., Englewood Cliffs, N.J.: Prentice-Hall Mittal, S. and S. 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