The Business Environment: Marketing and Planning - Assignment Example

University

Introduction

The organisation that anticipatory leadership will be implemented will be a smart phone company that known as SmartyPhone. Anticipatory leadership in this type of company is very important especially due to the fact that the company deals with an industry where technology and innovation is a very crucial. Through anticipatory leadership, abilities and intuitive instincts will enhance repositioning of the organisation to any market change (Savage and Sales, 2008). The smartphone market is always changing and new technology and innovation is being invented on daily basis. The organisation is aimed to compete with smartphone giants Apple Inc., which manufactures the iPhone. This type of leadership will also be crucial since it will enhance the entire leadership of the company to see a wide range of future possibilities, and take advantage of such market possibilities immediately. Threats will also be assessed and detected at an early stage, and the consumer preferences will also be detected at an early stage enabling the company to reposition itself in terms of marketing and planning. In a nutshell, the anticipatory leadership model in this organisation will have three main attributes: futuristic, strategist, and integrator. The marketing and planning will be focused on the future trends, the leaders will be strategists to ensure implementation of the marketing planning, and integrator implies that the leaders will be more than adept observers and analysing the smartphone trends rationally (Savage and Sales, 2008). In all the marketing and planning process of the product to the market the leaders will have the responsibility and obligation of dialoguing discovery of opportunity (Leyshon, 1976).

SmartyPhone’s special ability that will distinguish it from other smartphones in the market is the fact that it will have the ability to take the user’s vital signs and notice when the user’s health is compromised. This will be very useful since it will enable the user to seek medical attention at early stage. There is a demand for healthy lifestyle, and the campaign for the same is enormous, therefore there is a gap in the market of a device that can help people have their heartbeat, pulse rate or blood pressure taken anytime anywhere. Apart from the fact the fact that this will be a normal smart phone it will also be a ‘medical phone.’ It is anticipated that the smartphone will revolutionize the medical and the electronics industry, hence the dire need to incorporate anticipatory leadership in the company. It is also anticipated that medical stakeholders will partner with the company to provide and make the mobile phone more user friendly.

Environmental Analysis

The company anticipates to deal with marketing of smartphone in Asia and Europe. The company is also expected to operate in a huge macro-environment of forces that shape changes and stance threats to the company’s sustainability (Worthington and Britton, 2006). The company is challenged by two already established companies that create intense threat to both entry to the market and expansion. SmartyPhone Company does not produce is own phone, instead, A sister company is responsible for the production. As such, this scenario levels the competition with other firms. The company operate in two different continents; Asia - a developing continent and Europe - a developed continent. As such, there is a variation in terms of the preference of the market. The majority of the population in Asia are in preference of the low-end segments while the European market is characterized in high preference for the high-end segments. However, the market is not static as it is characterized by changes due to competition, revolution of technology, changes in the interest rates and recession. However, in both the targeted market there is a dire need for a healthy lifestyle. The market for smartphones in Europe is already great as the demand is high, and introducing a product that with a unique feature will be key in dealing with competition. This will enable the company to penetrate the market while marketing the smartphones in Asia where the potential for growth is equally high due to the rising population.

SWOT Analysis

Strengths

The company operates in a market that is characterized with competition, and the only way competition is curbed is by innovation and advanced technology. Through anticipatory leadership model the company new innovations will always be integrated an early stage, which implies that the company will be aiming to be that first in regards to a particular innovation. One of the major strength of the company is the fact that it will be producing smart phones with that have an enhanced medical application, assuring customers of a healthy living.

Anticipatory leadership in marketing can also be asserted as a strength since the all the risks and threats will be anticipated on an early stage, which means that a remedy will always be issued at an early stage. Since the executive marketers will possess the element of being futurist, it will be very easy to understand the dynamics of the company’s environment prompting them to think beyond the obvious.

The other strength is the fact that the sales team have rich experience in marketing and planning. The team has carried out comprehensive market research in various field. The team has also been taught about anticipatory leadership, which implies that they can understand consumer behaviour and influence purchasing behaviour of consumers earlier.

The aspect of being a strategist is at the core of anticipatory leadership, which means that the marketing team can see the possibilities that these any trend can accrue the organisation. The entire team of the company is able to use their structural insights to communicate within their organisations and collaborate with each other on how to formulate high-leverage strategies that will result SmartyPhone to dominate the market. The leadership model will also position the company to have adapt to take advantage of these forces, which will either be through creation of opportunities or minimisation of threat.

Weaknesses

The management of SmartyPhone Company is highly centralized since decisions are made at one central place to affect the decisions in another continent. The headquarters of the company are located in USA but the company serves both European and Asian markets. This makes disposition of decision to slow down the growth of market share in Asia because a critical decision may take time to actualize.

Language barrier will be a problem since the two continents have different languages, this will pose a challenge when communication will be needed due to the need to keep the teams in the two continents coordinated and integrated. While European are widely versed with English as a communication language, most of the Asian countries prefer to use their own native languages. This creates a language barrier especially due to the heavy accents in the two continents. Poor coordination due to lack of efficient communication skills can impact negatively on integration of the marketing procedures.

The geographical distance between America, Europe and Asia is too vast, it will therefore be difficult to coordinate logistics. This will also be a challenge since anticipatory leadership requires all the team members to deliberate on the future trends

Opportunities

The outlook of Asian and European smartphone industry is very promising, this is a very good opportunity for SmartyPhone Company with its smartphone. The demand is anticipated to be rising each time a new medical feature is integrated into the company. The high demand in the European market makes the smartphones a viable business for this company. Furthermore, the vast population in Eastern Asia that makes the Asian households should grow to be the biggest matrix even in global terms.

The increase in technological advancement is changing the primary roles of phones from just communication to other roles that require taking photographs, surfing the internet and connecting with people in a more abstract way. Therefore, adding a feature that helps the consumer to track their health will be very essential. The smart phone have revolutionized the traditional roles of phone thereby making them more preferred and in high demand.

The demand for smartphones is rising in Asia as more and more companies are coming up to offer the same products. This is a very great opportunity of SmartyPhone Company to equip its business with sophisticated technology and variety of smart features in its products. This will sets their smartphones apart in the market thereby making its brand more reputable than those of the competitors.

The legal and political framework regarding the electronic industry is not very strict as compared to other industries. This is a huge opportunity for SmartyPhone Company to launch its smartphone in Asia and Europe as it has the potential to face very minimal regulation in both continents.

Threats

The competition in the smartphone business is very stiff, especially in Europe where other multinational corporations have established their business and brands. This is the reason anticipatory leadership will be very fundamental in enhancing that competition is curbed.

Smartphones from competition are now characterized by large displays and advanced multimedia features, improved battery life and saving electricity consumption and thus, improving on these feature has become very challenging for SmartyPhone Company. This scenario has a great potential to significantly impede growth in sales resulting in a reduction in market share.

Total global growth rate in the smartphone business is about the turn into negative figures, the competition for market share is triggered to intensify. The number of smartphones available has increased in both markets and as a result, the risk of similar products cannibalizing each other has become very real. The main factors that are influencing competition are price, distribution, performance and economical. Methods of product promotion such as advertisement, brand reputation and marketing are other key factors that are influencing competition.

Right-sizing, outsourcing and reengineering developments in management may change traditional channel associations with dealers, distributors and brokers in Asia, which may result to a decrease in sales.

PESTEL Analysis

Political analysis

SmartyPhone product with the medical application features is likely to have many political problems in Europe and Asia. There is a probability that political insurgence in Asia that may result the company make the company to face some dangers. The political environment might also statute that the company’s product is compromising the medical field, and the reliability of the application is not certain.

Economic analysis

The company has to be prepared for any economic uncertainties in the future, for instance a global recession in the future might affect the company’s sales. It is also very vital to anticipate the fluctuation of oil prices that affect the economic situation of majority of the countries, especially due to the fact that the products will often be shipped to this regions. Other economic indicators such as unemployment rate and GDP of Asian market and European market has to be taken into consideration, the reason why anticipatory leadership is very crucial in this business.

Social analysis

Throughout the product lifecycle of SmartyPhone the company has to make sure that innovation is in line with customers’ expectations. Therefore, the marketing team has to be very keen to listen to what the customers are saying, and implement and integrate their concerns into the product. Taking into consideration the queries of the company will be critical in enhancing growth, and penetrating into other markets such as USA, and give iPhone a very stiff competition.

Technological Analysis

The main technological advantage of SmartyPhone will be to integrate he medical feature on the phone, since most smartphone have a common type of applications (Cartwright, 2016). This is a technology of its kind, it will be very interesting to customers since they will be keeping tab on their health anywhere at any time. The organization will work closely with medical stakeholders so as to ensure that customers’ in regards to efficiency of the product is ensured. This form of technology is aimed to give the company a competitive edge in the smartphone industry.

Legal Analysis

The main legal aspect that the company should ensure in both the markets are the laws and regulations that are drafted by the communication authorities of the respective countries where the gadget is going to be sold. The product also ought to be credited by the medical bodies in those countries, to certify that the application is reliable and credible.

Porter’s Five Forces

The porter’s five forces analytical tool is used to provide an overview of the competition in the industry.

The analysis using this framework reveals the following.

Rivalry among existing firms

There is fierce rivalry in the market in which SmartyPhone is to launch in both Europe and Asia.

Bargaining power of suppliers

Suppliers have insignificant power in the industry due to the variety of sources from where to get electronic supplies.

Bargaining power of buyers

Buyers have moderate power because, even if SmartyPhone is like a smartphone, there are no other producers that offer alternative choices.

Threat of Substitutes

There is a high threat of substitutes given the intense competition in this industry.

Threat of New Entrants

There is a threat to entry by new companies due to the high capital requirements, capacity of new entry and the high cost of developing a brand.

Marketing Strategy

The marketing of SmartyPhone will involve the use of anticipatory marketing, which will involve two components of the marketing strategy; consumer experience and consumer choice.

Consumer choice is essential in this case as it is the mental image that the potential consumers create when they hear about the product. Given that the product comes to solve one of the most fundamental challenges, it is aimed at appealing to people’s desires and preferences. According to Christensen et al., (2004), this phenomena is known as the self-referent image of a product and manifests when the consumers experience a combination of suggestive information, experience and knowledge. Such a product is most often what a consumer buys. By appealing to the health of the consumers, we appeal to their sense of desires and preferences to have a refined smart gadget while at the same time have their vital signs at their fingertips. In order for the consumer experience to take place and result in a sale, the company seeks to utilize Libet’s theory of free will by ensuring there is a significant time lag between the conscious purchase and the free will. This may be referred to as impulse buying and explains why consumers may have a reduced ability to respond to the product on time.

The marketing strategy adopted by the company focuses on achieving the following objectives:

• To develop a brand equity, this will be evaluated after the first financial year. The company aims at attaining an enormous brand awareness in both Europe and Asia after the end of the first financial year. This will help the company evaluate the possibility of opening the products to the global market.
• To create an inclusive awareness of the products and its capabilities. This will happen through advertising, partnering with appropriate stakeholders, promotion, holding tradeshows around Europe and Asia. The motive is to boost the company’s revenues and ensure that the SmartyPhone gadgets are the most preferred in the market.
• To partner with major corporates so as to increase the market exposure of product. This is very advantageous since partnering with corporates has the potential of enhancing mass purchase of these gadgets from the company. Hence, the company has partners with a strategic partner who is in charge of production of the smartphones. However, the company retains the sole right to make decisions related to marketing of the products.

Leadership Strategy

There are a few leaders in the world who have demonstrated the possession of intuitive instincts and potential abilities that allow them to respond the needs of the customers on time. The production and launch of SmartyPhone to the market employs the anticipatory leadership strategy, which the company has identified to be the most effective method of increasing the reception of the product to the market (Penn, 2007). The rationale for the reference of this leadership model is based on the fact that it allows the company to take advantage of the emerging possibilities while mitigating the risks and imminent threats. Anticipatory leaders have the ability to navigate through challenges and dilemmas and come up with a decision with the best consequences to all the involved stakeholders.

This leadership strategy has been key to the success of Apple’s products in the market under Steve Jobs. Apple has been able to successful employ anticipatory strategy in its innovation and design, especially for the production of mass products. Regardless, it presents the products as gifts so that people are more thrilled to find out the latest innovation in the smartphone world. Moreover, Heinz has always used the power of anticipation in eliciting the enthusiasm of the consumers, hence eliciting great demand for the products even before their launch. Given that this leadership strategy has been successfully applied in highly competitive markets and delivered remarkable results, adopting it in the marketing of SmartyPhone proves to be the best strategy of ensuring that there is enough consumer enthusiasm in the market before the launch of the gadgets.

In order to achieve the set goals, the leader will be required to do three things which are referred to as the triple As. The triple A of anticipatory leadership requires the leaders to anticipate the changes in the market dynamics. Then, the leaders is required to demonstrate the capacity to align, inspire, and enable the entire company to change for purposes of embracing the company’s goals. Lastly, the leaders is required to demonstrate the ability to take action by taking strategic decisions and focusing on aspects of the business that matter (Savage and Sales, 2008).

Target Market Strategy

The target market strategy of the company is fuelled by the implementation of its overall marketing strategy and strategic planning (Kotler et al, 2001). The segmentation of the market is highly skewed to the young people and those in their mid-life about the age of 50. This is because this is a highly innovative technology that requires a clear understanding of technology and its application. However, those in the senior years can get help from their families on how to check the vital signs using this gadget as it has been designed in a manner that makes it easy to use. The appeal to the young people seeks to cultivate a culture where young people are highly conscious of their health and take charge of their health through their daily activities. This can help shape the future of this generation by avoiding many chronic diseases such as diabetes and hypertension that are prevalent in the elderly.

In order to capture these markets, the company has designed the gadget in a way that it is attractive to many people. The gadgets range from those with the simplest features that require limited operational capacity to those with advanced features to cater for the needs of the young generation. Hence, the young ones do not need to carry two devices as one is enough to cater for their daily operations. The company is committed to offering quality SmartyPhone products differentiated from other smartphones in the industry through a differentiation strategy. The target market for the product is Asia and Europe. The European market is already developed due to the already established demand for smartphones, hence the market entry would be easy there. As such, they prefer different features as opposed to the Asian market whose market is undeveloped and therefore preference of features is also varied. The features used for differentiation include; the levels of compactness and battery life, design, and additional features but the feature for measuring the vital signs remains constant. These features will differ with the level of operation.

The company is committed to the production of products that deliver utmost satisfaction to its customers, which has prompted the company to implement a niche differentiation plan in the diverse market in the electronics industry. This will enhance its ability to suit different consumers’ needs. The new SmartyPhone device will serve the needs of the low income earners, middle income earners and high income earners.

Marketing Mix Decisions

The marketing mix is an essential part of marketing planning as it includes the main elements of the company that influences the performance of its products in the market. These elements are products, price, distribution and promotion (Kotler et al, 2001).

Products

The company will be dealing with smart phones that have the capacity to compete in the global market as they have a special feature of measuring the vital signs, which is different from other companies which add convenience and entertainment features other than health features. SmartyPhone will be marketed in Asia and Europe, and these gadgets are capable of meeting the customers’ expectation consistently, as they are designed for the multiple customers. The feature that have been incorporated in the smart phones are very unique, which gives the company a competitive edge over the rivals. Moreover, it is possible to customize the devices to meet the needs of a particular customer, for example a special customer may desire his gadget to be coated in something like silver. The design of the products has also been differentiated and it has been considered to both the high ended and low-ended segment. Color will also be used to cater for different customers as the product comes in various colors including white, grey, black, red and green. The design and the features of the products are aimed at ensuring that company gains a competitive advantage.

Price

Despite the high quality and the unique features offered by the SmartyPhone devices, they are still affordable and valuable to the customers’ needs. The value of the devices is reflected in the prices. Since there are various costs to be considered in offering the product such as insurance cost, shipping costs, and the custom duty, the price will differ from the actual price in the manufacturing firm. Nevertheless, the company is committed to satisfaction of the customers by observing the price and demand elasticity of the company’s product. In this case, the prices of the products in various markets will still be subject to the forces of demand and supply. Demand will be greatly influenced by factors such as market growth rates, average price level in the market average level of advertising, and the manner in which we shall differentiate the smart phones in the market. With regard to strategic partnership, the company will consider offering bulk pricing for the corporates that wish to purchase the devices in bulk for their employees. Another essential pricing strategy is discounts, which will be used to attract more customers to purchase the gadgets as there will be a probability of increasing the volumes of sales, and consequently the revenue.

Distribution

The distribution of these products will take into consideration that the devices are not perishable, hence, they will be shipped from the firm to the markets in Europe and Asia. The sale and distribution of the products in both markets will incorporate middlemen. Moreover, since the market of the products is in two different countries, it would be prudent to consider the involvement of import and export agents, as the shipping of mobile phones will be difficult at the port in terms of clearance in some countries in Europe and Asia. A warehouse will be set at some strategic points in the two countries to ensure that the cleared products are well stored as the sales team seek for their market.

Promotion

The company has opted to form strategic alliances as part of its primary promotional technique. This strategy involves partnership with industry huge mobile service providers in Europe and Asia so as to build their credibility in these new markets easily. This will increase confidence to potential customers in Asia and Europe, thereby increasing the company’s potential for success. Given today’s digital ear, the company will also promote the gadgets through online marketing s there is increased usage of the internet today around the globe. Internet does not only provide a cheap means of prod promotion but it is very effective in reaching the targeted consumers. Online marketing will target to rank SmartyPhone high in search engines such as Google, Bing, and yahoo. Other promotional techniques that will be used include the Print media such as magazines, newspapers and coupons and electronic media.

Implementation, Evaluation and Control

Despite the fact that this device is unique and seeks to deliver a different set of advantage to the market, it is also shares a lot of aspects with other smartphones produced and marketed by various manufacturers in the market, hence highly prone to competition. As such, the design and manufacture of SmartyPhone will be based on research and development (R&D) to make sure that more enticing features are incorporated in the devices. It will therefore be necessary to make sure that the market is organized to focus and meet the specific needs of the low and high segments. The marketing efforts for SmartyPhone will be organized around various sales groups: manufacturing group; non-manufacturing business-to-business group; consumer product customization group, and group linked to the industry. The sales manager will head the sales groups who will be answerable to the marketing director. The implementation will take into account both the high and low market segments. All implementations activities will begin at the coming financial year on May, 9th 2016. The sales directors in Europe and Asia will facilitate all activities. The evaluation and control of the marketing process will require benchmarking the expected goals against the financial expenditures. These aspects are important in business evaluation and they will be compared for purposes of clarity of the objectives. The process of evaluation and controls will largely rely on aspects related to performance standards and controls of financial. All financial expenditures will be reported for purposes of controls. The report will be prepared in a standardized reporting form to make the evaluation process credible.

Results – Income Statement

The analysis of the projected income statement shows that the company will receive a favorable reception in both European and Asian markets. The gross profit of the company will continue to increase after an effective introduction of SmartyPhone in the two markets as formulated in this plan. Market research costs will characterize the initial investment. After the introduction of the product to the market, the cost structure will comprise of administration, promotion, channel investment, production line costs. While these costs increase with increase in operation, marketing research costs will decrease since it would have been explored enough. The projected income statement is presented as below.

Projected profit and loss account

Europe

Asia

Total

2018

2017

2018

2017

2018

2017

Products sales

282000

275005

786000

311064

1068000

586069

Repairs sales

13066

9365

4770

3450

17836

12815

Variable Costs

phone (TYPE1)

163132

55880

0

0

163132

55880

phone (TYPE2)

0

0

214322

127815

214322

127815

phone (TYPE3)

0

0

244093

66623

244093

66623

Repairs

10051

7204

3669

2654

13720

9858

Total Variable Costs

173183

170195

462085

197092

635268

367287

GROSS PROFIT

121883

114175

328685

117422

450568

231597

Fixed Costs

Administration

4600

8050

5750

5750

10350

13800

Promotion

2400

2100

5200

2000

7600

4100

Channel Funding

760

1600

2045

1250

2805

2850

Production Line Costs

10500

14000

Market Research

2200

2000

Warranty

16460

9595

Repair Quality Investment

300

300

R & D

10000

9000

Total Fixed Costs

7760

12750

12995

10000

60215

55645

OPERATING PROFIT

114123

101425

315690

107422

390354

175952

Projected profit and loss account