The Moderating Effects of Market Orientation - Assignment Example

Name : xxxxxx Tutor : xxxxxxx Title : xxxxxxx Institution : xxxxxxx @2010 (A) GENERAL 1. Provide detailed description (with illustrations) of the Moderators of market orientation, and discuss their link to “strategic marketing management” and “organizational performance” Market orientation is basically a company’s philosophy which is aimed at identifying and meeting the needs of its clients, through a well planned product mix. One moderator of market orientation is competitive environment. A competitive environment provides a consumers with many options and alternatives from where he or she can buy from, hence the need for the manufacturer or supplier to find a way to ensure full satisfaction of the customer, so that the customer will identify the company or manufacturer as the producer of choice. A competitive environment determines various activities and precautions to take while carrying out market orientation. Market turbulence also greatly influences how an organization will come up with a marketing orientation. Some trends in certain markets make it a bit hard to predict what will be happening next, and thus it is extremely difficult to come up with policies which will last for along time. For example, when demand of a product rises sharply and falls within a short period of time, and this happens repeatedly over a period of time, it is difficult to come up with fixed prices due to these price fluctuations. On the other hand, a producer can not bank very much on a product which can easily find a complete substitute from another competitor. The producer should therefore thoroughly study the existing market trends before coming up with a market orientation (Kim and Ye 2004). Some products are subject to technological advancement and change. Whenever a corporation’s main product line consists of items which we can term as bleeding technology, there is always a possibility that the item will be in the market for quite some time. However, many products tend to be easily overtaken by newer technology and so there is a need for a firm to keep carrying out inventions and innovations in order to stay abreast of technological advancements. Technological turbulence therefore affects market orientation to a great extent. These moderators of market orientation determine how an organization defines its business, missions and goals because they determine how marketing concepts will be implemented. They determine the product mix and the pricing, target market and how a company is going to meet the satisfaction of the consumer. This means that when coming up with a strategic marketing policy, these moderators will determine the necessary plans that a company will take. Since they affect the nature of production which is carried out by the organization, they affect the output from the organization and therefore when coming up with an organizational performance policy, they will greatly be featured. (B) CASE STUDY 2. How would you describe Samsungs marketing strategy within the Canadian Consumer Electronic Market in terms of their segmentation, targeting and positioning within this sector? In terms of segmentations and targeting, Samsung went ahead to come up with four different homogenous groups, which are the high income families, the young generation, business users and the hobbyists . These four segments enabled Samsung to narrow down to the needs of each specific group and produce and market appropriately and at affordable prices. The corporation has put great efforts to maintain a product mix that meets the needs and preferences of each of these groups. Each of these groups not only has a different purchasing power, but responds uniquely to a marketing mix and is substantial enough to be profitable. This was a perfect approach considering the diversity in the Canadian market. The corporation has done vigorous campaigns to create perception that there products are the best, and to portray the company in the best way possible. This was a strategy which bore fruit, since creating a good rapport in the consumers’ minds would easily catapult the corporation to the leading position in the whole of Canada. If every consumer thought of Samsung as the brand of choice, less advertisement would be required to keep the sales and demand high. This is one of the key areas which SECA should have allocated the greatest resources towards. A continuous stream of advertisement would easily create a positive perception towards Samsungs products in the Canadian market. Brand positioning would require an initial increase in the advertisement budget and massive advertisement campaigns. This is why Park would need to increase the advertisement budget which had been constant for over five years. 3. Describe Samsung’s marketing mix within the Canadian market in terms of the “4P’s” –“product”, “price”, “promotion” and “place”. Samsung has greatly invested in creating a successful marketing mix in terms of the right products, right prices, selling at the best possible places and using the most suitable promotion methods. This is a vital part of implementing the marketing strategy and ensuring success in any given market. Products The products that were marketed by SECA, which is Samsung Electronics Canada, were categorized into two broad categories, namely consumer electronics and appliances, and information technology. Information technology equipment included CDMA phone which were marketed by Samsung Telecommunication America. Most of these products were imported either from Korea or USA, and they targeted various markets. The company maintained a wide range of products on sale, which were diversified to target every section of the market. There were various items meant for the high end market and also for the low end market. The company sold value priced VCRs, conventional televisions and appliances. There were high-end televisions such as plasma and digital light processing HDTV’s. The MP3 and DVD players were also available targeting the general consumer while the older products such as the VCR, conventional TVs and Kitchen appliances were readily available due to the obvious and long term demand for these commodities. The market of these commodities was readily assured since items like household appliances were always in demand and would amass huge sales volume, despite their low profit margins. This was important in securing a large consumer base and building brand equity. The rapidly growing information technology market was catered for by the LCD computer monitors which were less bulky and more stylish compared to the old CRT monitors. These proved a big hit with the corporations which were phasing their old equipment in order to enhance classic and corporate image. The laser printers, CRT monitors, hard disk drive and optical disk drives were some of the other information technology products which were in the market. Price The pricing of the various commodities largely depended on the target market for each product, and therefore the profit margins varied greatly among the various commodities on offer. The ordinary consumer appliances like the household appliances attracted the consumers whose price was a major determinant and could easily switch to the more price friendly manufacturers. Durable goods for high income families like expensive TV sets were highly priced since the buyers were often looking for quality and durable products. This was also so for the business user segments, whose main criteria for product were reliability and ability to satisfy certain specific needs. The young generation which was tech-savvy would buy a wide range of products which were new in the market. However, this market faced some serious financial constraints and therefore these products like MP3 players were not highly priced. Since SECA acquired most of their products from the mother company in Korea, most of their prices also depended on the factory transfer prices, since the mother company also needed to make some good profits. This made the company to largely rely on huge sales volumes to increase revenue, as opposed to high prices, so as to avoid pushing the prices too high. Promotion Advertisement was not a major problem for Samsung in Canada. The prevailing market conditions in Canada were similar to the ones in the United States. This meant that the advertising strategies employed in the United States could be replicated easily in the Canadian market with impressive results. However, this had a negative implication in that the company lacked customized advertisement for the Canadian consumers. However, SECA participated in promotion of high definition television programming. This was an important market since it had a long term profit potential and was rapidly growing. Associating itself with HDTV also portrayed Samsung as a leader in this field, which was regarded as reserved for the top inventors. Place The outlets for retailing a commodity greatly determine its availability and accessibility to the consumers. It is therefore very important to ensure that proper channels are used. The biggest single outlet for Samsung Commodities was Future Shop. This was the biggest single electronics seller in Canada. Samsung used this opportunity to make its goods available to many people at the leading store. Although Samsung did not run its own store, the corporation relied on many leading retailing stores like the Bay, A/V Specialty stores, Sears and other retail stores like Wal-Mart. This approach directly placed Samsung’s commodities at the doorsteps of the consumers, hence gaining a competitive advantage (Kim and Ye 2004). 4. Why is branding important to Samsung? What specific actions should Samsung take to further strength their brand? Like any other company, branding is vital business process that can not be ignored if the company wants to establish itself globally and in each local market. Branding involves making a trademark or a good name. Samsung already faced stiff competition in the international market from other already established brands like Sony, which enjoy quite some notable goodwill from the consumers globally. These brands have been known in almost every household for a long time, even before Samsung had a chance to establish itself outside its mother country, South Korea. The amount of competition that Samsung is experiencing is quite immense. Branding will help to build a strong reputation among the consumer world. This is important considering that Samsung was already being regarded as a producer of low to mid range products sold at affordable prices. To build consumer confidence and trust, Samsung would need to build a strong brand name, where every consumer will be satisfied to be associated with. This will help in creating customer loyalty and thus maintain a high sales volume. Branding will form part of the wider advertisement strategy for Samsung. The brand will be a major marketing tool on itself, and will keep reaching more and more consumer even without the conventional marketing methods. By building the brand Samsung, the corporation will have established a system of advertising which continues on and on, through the sale of their products. Each product that is sold will be a marketing tool by itself and will be in a position to draw many consumers who are brand sensitive. Branding will also play a big role when it comes to launching new products in the market. Samsung has invested heavily in research and development of new products. This implies that more and more devices will keep rolling out of Samsung’s production lines every year. The success of these brands will largely depend on the goodwill that the brand Samsung enjoys among the consumers since consumers will tend to buy them because they trust Samsung as the brand of choice. To further strength their brand, Samsung will need to integrate their brand in all their branches and subsidiaries worldwide. This will involve training their staff on their expected role in promoting the brand, as well as ensuring that every marketing objective they undertake will conform towards their goal of building a strong brand name. In addition to this, the company will need to ensure the brand parity is considered and the minimum requirements of their products are achieved. This also means that the quality of the products is strictly maintained and no compromise in quality of the goods produced. The corporation also needs to closely monitor the competitors’ developments and trend, in order to ensure that the products they come up with are top of the range. This is a key touchdown point for attracting consumers. Other activities to strengthen their brand will include: i. Tracking the advertisement programs to see what is working out and what is not bearing fruit in the advertisement activities. ii. Active participation in social events and other activities like sporting events in order to build the corporate image and also trust and friendliness among the consumers. iii. Consistent and continued marketing plan in order to build brand equity. iv. Maintain a high invention and innovation record in order to keep the consumer wanting to upgrade their products and acquire new ones. Bibliography Kim Christian and Ye Fan 2004, Samsung: Redefining a Brand, Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business. Read More