Googles Marketing Strategy - Case Study Example

Google’s Marketing Strategy (Name) (Institution Affiliation) (Date) Executive summary Google is one of the leading technology companies in the world. In an increasingly competitive environment, the company has to keep on scanning the environment for new opportunities and develop a comprehensive marketing strategies to push this opportunities to their customers. In this report, two opportunities that Google can invest in have been identified. These two opportunities include investing in the unsaturated smart phone market and to consolidate all its services to become the largest social media platform. Having identified the marketing opportunities, a number of marketing concepts are used to develop distinctive marketing strategy for the two opportunities. These concepts include perceptual positioning maps, RBV model to assess competitive advantages and capabilities, value proposition, marketing mix and finally an implementation schedule has been developed. Google’s Marketing Strategy 1.0 Introduction Strategy refers to a long-term plan which is aimed at achieving certain objectives. Marketing strategy is therefore a plan designed at achieving a business’s marketing objectives (Schnaars, 2012). Developing a marketing strategy is necessary for any business since without one, a company’s efforts to attract and retain customers are likely to be inefficient and haphazard. Marketing strategy focuses on ensuring that a company’s products and services meet consumers’ needs and developing profitable and long-term relationship with them. To achieve this, a company should develop a flexible strategy that is able to respond to changes in consumer perception as well as demand. There are various benefits of developing marketing strategy for a business. To start with, a marketing strategy offers a clear direction on a company’s brands. Having a clear direction ensures that every effort is focused on achieving the marketing, sales, and financial objectives. Secondly, marketing strategy enable a company to have a competitive advantage over its major competitors (Schnaars, 2012). The marketing strategy of Google will be based entirely on communicating value of its products to the target consumers. To do this, a comprehensive marketing mix will be developed to outline the product strategies, price strategies, promotion strategies and the place strategies. The company is looking to develop a distinctive marketing strategy for both of the suggested products. To support the marketing strategies number of concepts will be used. These concepts include, value proposition, Sustainable Competitive Advantage, Perceptual positioning maps, marketing mix after which an implementation schedule will be developed. 2.0 Company profile Google Company was established as an international global company in 22nd October 2002. The main focus of the business is to offer search engine, array advertisements, create android operating software, hardware products including smart phones, social media platform through Google Plus, consumer applications through Google Play, commerce and enterprise. The company main source of revenue is online advertisement. Google is able to deliver its products in over 100 languages and in over 50 countries worldwide. On its website, consumers can access information in different languages and in many formats. With the search engine commonly known as ‘Google Search, consumers can find information they are looking for by simply tying in their queries and the search engine produces multiple results for the same (Reuters, 2015). 3.0 Opportunities and Justification 3.1 Expand into the Smartphone Markets According to comScore, Inc. Apple is ranked as the top manufacturer of Smartphone with 41.6% market share in the U.S with Google Android being number one Smartphone platform with 53.1% platform market share (comScore, 2015). However, the Smartphone market in the U.S is not saturated with millions of customers still in need of Smart phones many of which with come with Android’s operating system. Currently, Google’s market share in the Smartphone industry is very small with only two Smartphone in the market, which include Nexus 5 and 6. Source: comScore, (2015) Therefore, Google should expand into the Smartphone markets by offering a varies of Smart phone devices to cater for different customers who’s needs have not being met by the two devices that the company has manufactured. These devices will come with Android’s OS which has the largest market share in Smartphone platform hence making the phones to easily acceptable by the customers. 3.2 Creating a consolidated social media platform Google Inc has an opportunity to integrate all its services in one platform to make Google plus the largest social media platform with all the services under one roof. Social networking has become a necessary evil for many companies as the world moves towards globalization and internet use for almost everything. Google has successfully been able to launch a good web presence for all its products including the search engine, free email services, YouTube, Picasa, and Apps stores. Considering that Google’s main source of revenue is online advertisement, creating a strong social media platform will attract a lot of traffic which will help Google in increasing is online advertisement revenue (Kemp , 2015) There has been a rapid growth all everything related to digital include use of mobile phone, internet and use of social media platforms. In 2014 for instance, a a landmark growth was reported for everything digital and it is expected that in 215, the growth will even be more significant. When it comes to social media, the market has been growing at a significant rate with active users estimated to be at least 29% of the world population. the active user per month for the most active social media platform is are estimated to be 2.08% in January 2015 which is an increased of 12% since last year the same period. According to a research conducted by Global Web Index, the average time used by social media users in a day is 2 hours and 25 minutes. As such, Google Inc. should solidify its Google plus to take advantage of the increasing numbers of social media user. Below is a chart indicating social media use by January 2015 (Kemp , 2015). 4.0 Positioning Positioning is about how a company’s product is perceived in the minds of the consumers (Bill, 2001). Google is looking to position itself as the company with the largest social media platform with all its services under one roof. It is also looking to be the smart phone company with the most reasonable prices and with the most available with access to all Google services. To analyze the positioning of Google Inc, two perceptual maps will be constructed. The first one will be in relation to the smart phone market and the other one with regards to the social media platforms. In the smart phone market, the major competitors are Apple, Samsung, Sony, Blackberry, HTC and Asus. The perceptual map below was plotted based on design, durability, product features, target market, performance and customization. Google’s Nexus is looking to attract youngsters and fashion forward people who are always looking to buy what is trending and fashionable. This group is usually looking for smart phones which are classy and have unique features and packages without paying much attention to the pricing of the product. Google has already started creating ways to attract this group of people by creating unique features like Project Fi which is only accessible to users of Google’s smart phones. In the social media market, Google will position itself as the preferred social media platform where users can search, access the mail, view videos and access all Google services under one website. We are developing a snake or classical positioning map based on the professionalism versus fun against public or private. The consolidated Google Plus platform is to be positioned as a professional media where users can get everything under one platform but also be able to network. 5.0 Value Proposition Value proposition can be defined as what the customer is paying for when they buy product. It can also be defined as how the company offers value to its value recipients. However, value is not only limited to the products the company is offering, value recipients is not only limited to the customers and value proposition is not only related to the company’s sources revenue. Value proposition is basically about what value is to be provided and why the value being provided (Laja, 2012). Google generated a large proportion of its revenue from advertisement. However, this does not mean that Google has directed its value proposition entirely on the advertisers. Below are the value recipients for the proposed investment ventures of Google Inc. The user-a number of value propositions will be provided on the smart phones and website for free including Gmail, Play store, free access to eBooks, maps and others Network partners- they will get revenue for the relevant advertisements on their websites Developers –this are the people who give platforms for free such as GWT that allow development of rich content. The authors and publishers of all books and other print available for sale in digital form Employees- employee of Google have good working conditions, job security and “own time” Google owners or shareholders- this is the people who want value for their wealth. We are looking to do this by ensuring constant growth and financial performance. Society- we are providing them with free tool including blogs and localized versions of the consolidate Google plus for those in developing countries. Strengthening our value propositions We are looking to strengthen the valuable capabilities and assets we have been offering to our value recipients by creating joint value proposition for all of them. We want to develop more smart phones so that our customers can not only use our android operating software but our hardware as well. We are also looking to consolidate all our services under one platform which is Google plus to ensure maximum value for all value recipients ("Google value proposition," 2012). 6.0 Resources and Capabilities First, Google has powerful infrastructure which include efficient supply chain infrastructure as well as a massive investment in equipment and assets which include enormous warehouse facilities, transportation vehicles, as well as high tech inventory systems. According to a Data Center Knowledge reported, Google uses approximately 900,000 servers. Moreover, the company has an expansive infrastructure of Android OP which is used by approximately used by 79% off all the Smartphone in the U.S. With such incredibly powerful infrastructure which is not easily replicated give the company a competitive advantage (Matthews, 2012). Google can use this infrastructure to expand in the Smartphone market as well as integrate all its services in one platform to make Google plus the largest social media platform with all the services under one room. For instance, the company can used its laid infrastructure of Android OS to manufacture more Smartphone and it over 900, 000 servers. Google offers innovative services which include Google Docs, Gmail, Google Apps, Blogger, as well as Google search. While most of these services are in-build, the company has also acquired other services such as YouTube. Google services are incredible because to user at a zero cost. Although its competitors can offer such services to users, the unique thing with Google is that it can enable its users to enjoy a one-stop-shop for all their computing and internet needs (Matthews, 2012). Therefore, this results to a hard competitive advantage to be matched by competitors. Lastly, Google holds 66.4 percent of market share in Internet searching and the Microsoft is the closest competitor with 15.3% of the market share (comScore, 2015). The company has held this market share for a long period. Moreover, Google does not only hold a large market in the search industry, the company leads in other markets. For instance, according to Comscore, Google hold a significant market share in the in the mobile operating system as shown in the diagram below. Unlike the search and mobile platform industries where Google has historically dominated, the company less than 3% market share in the mobile phone industry. However, the company has capability to penetrate into this market due to its infrastructure and innovative services. 7.0 Sustainable Competitive Advantage A sustainable competitive advantage is achieved when a company acquires or creates attributes that enable it to outperform its main competitors. These attributes may include having highly trained and skilled personnel or natural resources. Therefore, it’s an advantage over a company’s competitors and also it should have some life. Google has an advantage over its competitors because of its size, market position, and innovation. The company’s competitive advantage has been narrowed down into three main categories consisting market share, infrastructure, and innovation as discussed above. To assess if the company’s competitive advantage is sustainable, we will use the resource-based view model. The model will apply VRIN framework that assess if the company’s resources are valuable, rare, as well as costly to imitate (Jurevicius, 2013). Therefore, Google resources and capabilities will be assessed on; Valuable As discussed above, Google has incredibly powerful infrastructure and innovative services which makes to increase the value it offers to its clients Rarity Google has rare services and infrastructure. This is because the company has embraced innovation in all its activities. Only few companies such as Microsoft and Yahoo have such resources. Imitability Google services are costly to imitate or substitute. Although its competitors offer some of its services, the company has created one-stop-shop for all their computing and internet needs making their services unique. Moreover, the company has historically dominated the search and mobile platform industries Therefore, since Google resources are Valuable, rare, and costly to imitate, the company has a sustainable competitive advantage as shown by the diagram below Source: Jurevicius, (2013) 8.0 Marketing mix 8.1 Product Google+ as a social networking site for Google gives the company a fairly strong competitive edge in internet applications and advertising. Google defines Google+ as a social layer for its services. Google+ allows users to interact with others who share common interests with them and link up accounts to enhance online identity (Google Inc., 2015). This connectivity allows Google to use information from different user accounts to make social networking more productive and engaging to users (Google Inc., 2015). Google can achieve targeted advertising with such vital information on Google+. The product is at maturity stage where it needs to be reinvented to avoid decline. Google’s Smartphone will compete effectively with others in the market. Google has the superior advantage of developing the hugely successful Android operating system. Google will be pursuing an expansion strategy similar to Apple and Microsoft by having its own range of smart phones to use a Google operating system. More than 52% of smartphones sold the world over use Android operating system (Tech-Thoughts , 2013). 8.2 Price Google operates a unique business model whereby the company does not directly charge users for its services. Google uses its services such as email, search engine and YouTube to deliver targeted advertisement to users (Wasserman 2013). This is also the case with Google+. Google+ advertising services can be set lower than average prices in the market. This will allow Google to compete effectively given the fact that Facebook and Twitter are stronger competitors in social networking at the moment (Wasserman 2013). Google’s operating system is mostly popular in the emerging markets. A Google smart phone with Android operating system can be very beneficial to the company as it does not have to pay licensing fees. Lower prices for mass market exploitation will significantly increase the profitability of Google. 8.3 Place Google+ should take very minimal time to load to allow users even in areas with poor internet connectivity to enjoy the product. An easier-to-use product that is readily available online will be consistent with Google’s aim of getting as many users as possible. With many users on Google+, Google will be able to increase its profitability significantly. Google’s Smartphone can be distributed through appointed dealers. While this channel may be slow, Google will be able to improve the products functionality. Dealers will work with Google closely to ensure that the product is continuously fixed or replaced. This is critical for Google’s smartphones considering the fact that the company has no prior experience in hardware production. 8.4 Promotion Google’s Google+ and smart phones are targeted for the general market aged between 18 and above. This group is likely to have several Google accounts that can be integrated on Google+. Google’s advertisements will also be effective by targeting audiences in young adulthood and above. Google will position Google+ as a superior social network that improves users’ engagement with people with similar interests as theirs. Google should run TV and digital advertising messages that position Google+ as a social layer to Google services and a connection to other users of Google services. However, there is a critical need for Google to market the product with a different brand name that will be able to compete as a social network. Currently, Google+ may be mistaken with Google’s search engine. Google’s Smartphone should be marketed as functional yet affordable devices from a brand associated with innovation and reliability. Google’s Smartphone should be marketed aggressively through electronic, digital and print media. An integrated marketing communication strategy will be effective in positioning the brand as a quality product that offers a logical alternative to expensive products. 9.0 Stages of Implementation Stage 1: Aligning Company’s Initiatives With this new strategy, Google will now have new priorities as well as new tasks. The company should review every activity apart from most functional against its relevance to its new differentiation strategy. Stage 2: Align Budgets and performance Since the new strategy needs to funds, Google should allocate specific budget alongside operating and capital budget. Moreover, the company’s performance should be aligned to the new strategy Stage 3: Structure follows strategy Google should assess if strategy may require a transformation to its structures. This will ensure that the company’s structure will allow the new strategy to cascade across the company in an efficient and meaningful way (Berg, 2012). Stage 4: Engage Staff For a strategy to succeed, the company staff and key stakeholders must be engaged since they will be responsible in delivering the new strategy (Berg, 2012). Google should engage its staff in implementing the two opportunities in order to guarantee success 9.0 Two special features of implementation For the marketing strategy to be implemented successfully, there are two important features that must be there. To begin with, the organization must chose a visionary leader to communicate the vision in the marketing strategy and create a path that the whole organization needs to follow so as to be successful. Second, there needs to be a strategic map which will outline exactly what is needed to achieve the implementation of the strategy. This strategic map will include the finances needed, the market for the goods, the people needed to make it happen and the strategic partners (Lorette, 2014). Conclusion The aim of the report was to develop a marketing strategy after identifying the opportunities. The report accomplished this aim having started by indicating that the aim of the marketing strategy was to communicate its value to customer. Several concepts were used to evaluate Google position and whether or not it is going to succedd in implementing the plan. The value proposition, competitive advantages and capabilities indicate that Google is in a good place to implement the marketing strategy,. The marketing mix gave details about the marketing strategy including product strategy, price strategy. Promotion strategy and Place strategy/. Finally, the implementation plan outlines steps needed to implement the marketing strategy. References Bill, M. (2001). Do traditional strategic concepts apply in the e-marketing context? . Journal of Business Strategies , 18(02), Retrieved from http://www.freepatentsonline.com/article/Journal-Business-Strategies/81296799.htm l Laja, P. (2012). Useful value proposition examples (and how to create a good one). Retrieved from http://conversionxl.com/value-proposition-examples-how-to-create/ Lorette, K. (2014). What is strategic implementation?. Retrieved from http://smallbusiness.chron.com/strategic-implementation-5044.html Reuters. (2015). Profile: Google inc (goog.o). Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=GOOG.O Kemp , S. (2015). Digital, social & mobile worldwide in 2015. Retrieved from http://wearesocial.net/blog/2015/01/digital-social-mobile-worldwide-2015/ Google Inc. (2015). Get the most out of Google+ - Google+. Retrieved May 12, 2015, from Google: http://www.google.com/+/learnmore/features.html Tech-Thoughts . (2013, August 19). Smartphone Market Share by Country - Q2 2013: Android Leads, iPhone Slips, Windows Phone Inconsistent | Tech-Thoughts by Sameer Singh. Retrieved September 6, 2013, from Tech-Thoughts: http://www.tech-thoughts.net/2013/08/smartphone-market-share-trends-by-country-q2-2013.html#.Uio1smczdtA Wassermann.T,. (2014 December 9) New Google+ Ads Won't Run on Google+, Mashable. Online, retrieved 12 May 2015 from HYPERLINK "http://mashable.com/2013/12/09/google-plus-ads-outside-network/" http://mashable.com/2013/12/09/google-plus-ads-outside-network/ Jurevicius, P. (2013). Strategic managemnt insight-resource based view. Retrieved from http://www.strategicmanagementinsight.com/topics/resource-based-view.html Matthews, J. (2012). What are google's competitive advantages?. Retrieved from http://jasonmatthews.hubpages.com/hub/What-are-Googles-Competative-Advantages Berg, R. (2012). 5 essential steps to successful strategy implementation. Retrieved from http://bergconsulting.com.au/Berg_Consulting_Blog/5-essential-steps-to-successful-strategy-implementation comScore. (2015). comscore reports december 2014 u.s. smartphone subscriber market share. Retrieved from http://www.comscore.com/Insights/Market-Rankings/comScore-Reports-December-2014-US-Smartphone-Subscriber-Market-Share Schnaars, S. (2012). Marketing strategy. (2ND ed.). New York : Free Press Google value proposition: Saospe [Web log message]. (2012). Retrieved from https://notesinthecloud.wordpress.com/2012/08/26/google-value-propostion-saospe/ Read More