Ch 17 - marketing strategy

Question 1

What are some marketing objectives

Answer 1

» increasing sales of an existing product/service by selling to new markets or selling more to the existing market

» increasing sales of a product or service by improving it

» achieving a target market share with a newly launched product

» increasing market share

» maintaining market share if competition is increasing

» increasing sales in a niche market.

Question 2

What are the legal controls on marketing

explain each

Answer 2

Weight and measures - Can’t sell underweight goods

Trade descriptions - can’t give misleading impression about a product

Sale of goods - It is illegal to sell: products which have serious flaws or problems, that is they are not of a satisfactory quality

Supply of goods and services act - This Act does the same for services as the Sale of Goods Act does for products.

Cant make misleading price claims

Consumer contract regulations - Consumers are allowed to return the product within 14 days.

Question 3

Pros of entering a foreign market

Answer 3

Pros:
Might have much greater growth potential
There is a wider choice of location to produce products
Home markets might be statured - allows for higher sales
Trade barriers reduced in most parts of the world - easy and profitable to enter new countries

Question 4

How to tackle problems of entering a foreign market

just list

Answer 4

Joint ventures
Licensing
International franchising
Localising existing brands

Question 5

What is a joint venture

limitations

Answer 5

Two or more companies agree to form a new child company together.

Cons:
Management conflict between the two businesses
• Profits shared.

Question 6

What is licensing
cons?

Answer 6

this is where the business gives permission for another company in the new market being entered to produce the branded or ‘patented’ products under license.

Cons:
Quality problems caused by an inexperienced licensee could damage brand reputation.
• Licensee now has access to information about how the product is made – could develop a better version and become a competitor.

Question 7

What is international franchising

limitations

Answer 7

this means that foreign franchises are used to operate
a business’s franchise abroad

Cons:
Quality problems or poor service offered by franchisees could damage brand image.
• Training and support will need to be provided by franchisor - additional cost

Question 8

What is Localising existing brands

Limitations

Answer 8

It means that there is still a common brand image for the business but it has adapted to local tastes and culture, therefore increasing sales.

Limitations
May be less successful than a new product made to meet local cultures and market conditions

Question 9

Cons of entering a foreign market

Answer 9

Lack of knowledge - may not know enough about the habits of customers and competitors of that market

Cultural differences - religion or culture may mean that some products won’t sell in another market

Increased sick of non-payment - Diff in methods of payment may lead to non-payment

Increased transportation costs - Products have to be transported over long distances and the cost of production will increase.