Marketing Strategy Flashcards
pros of marketing planning
- reduces risk of failure of novel strategies as clear objectives are set, research undertaken, coordinated strategy used and budget is made
- gives direction to departments to coordinate and work towards objective set
cons of marketing planning
- small business may not have skilled managers with expertise to produce effective plan or the resources to conduct good market research
- is only a plan and can be affected by changing market conditions
eval marketing plans
- depends on skill of who created it
- must be flexible to adapt to dynamic market
- depends on quality of market research it was based on - will lead to appropriate strategies being used
what are the methods of entry in intl markets?
- export (direct and indirect)
- franchising
- licensing
- FDI in subsidiaries
- joint ventures
marketing strategies need to be…
USE FOR EVAL
CONSISTENT
COORDINATED
FOCUSED
pros of exporting directly
- control over marketing
- control over production quality
- no commission to intermediaries so profit margins intact
- less costly and more flexible than setting up operations abroad - set up and stopped quickly and the retailer takes the risk
BUT no guarantee that retailers will give a high profile, so sales may not increase very fast
cons of exporting directly
- Trade barriers like tariffs - more expensive for market so lower demand
- transport costs may offset any price/cost advantage
- Retailers may not prioritise sale of product/ prioritise other companies’ products - sales may not grow quickly
- may have limited knowledge of differences in consumer needs abroad so fail to adapt products - lower demand and sales revenue OR may not have connections to retailers so harder to sell
pros of exporting indirectly (agent)
- agent has local market knowledge and distribution network - more rapid sales growth
- fewer employees involved in selling abroad e.g. visiting managers which reduces costs
cons of exporting indirectly
- commission to be paid to agent will reduce profit margin
- agent may represent rival products as well so may not focus on increasing sales- slower sales growth
pros of international franchising
- franchisees cover capital and set up costs - lower need to borrow finance; wider growth in less time
- franchisees may be more committed to franchise success than a branch manager - financial investment and returns dependent on profits and revenues - so may offer better customer service + quality
cons of franchising
- must split profits - less retained to do xyz
- poor franchisee can damage whole brand image - may not stick to quality standards - customer expectations of all franchisees worsen and will lose sales
- hard to monitor performance of every franchisee - may not stick to standards
pros of becoming franchisee
- less risk as using established product and brand - grow sales quickly
- support from franchisee like training and advice make it easier
- no competition from same franchise in that area- reduces marketing costs
- easier and cheaper to raise finance due to lower risk to bank
cons of becoming a franchisee
- split profits
- less control over business decisions and marketing - strict standards and rulesso may not meet your own objectives
- susceptible to poor performance of other franchisees!
- initial license fee is expensive
- local promotional costs - your responsibility
should you become a franchisee? depends on
- size of fee
- size of cut of profits
- appetite for risk - could set up your own
- objectives - if creativity important
- available finances and cost of other growth methods
- economic climate - established brand names more successful during recession
should you franchise your business? depends on
- quality of the franchisee! - judge based on skills, experience, business plan etc
- is it multi-location? needs some degree of decentralisation for local needs and customer service
- attitudes of managers - how risk averse?
- available finances - may not have enough for more expensive ways of growing
- size of cut of profits
pros of joint ventures
- benefit from market base of partner as an unknown business in the new market - faster sales and market share growth
- shared risk of business failure
- investment costs lower as shared
- benefit from local expertise of partner - navigate cultural differences in HR or marketing
- synergy - combined expertise and specialisations may result in powerful USP
cons of joint ventures
- loss of control as decision making is shared - businesses may have conflicting objectives
- slower to set up than exporting/licensing
- failure of one partner puts whole project at risk
- trade secrets may need to be revealed - loss of competitive advantage
pros of licensing
- saves transport costs of export; saves time (fresher food and quality?)
- avoid capital cost of building factory/shops - low risk; less need to borrow
- access to existing distribution network - increase sales faster
- avoid tariffs/quota
- license fee revenue
cons of licensing
- may be limited way to grow as might have to offer exclusive rights
- loss of quality control - brand image
- unethical methods used by licensee to cut costs - brand image
- licensee business fails - production and sales stop and fee revenues fall
pros of direct investment
- retain full control over operation quality and marketing; also unlike merger or joint venture
- profits not shared
- may allow for vertical integration with suppliers/retailers - reducing risk in supply chain
- could decentralise, which will make you more responsive to local needs
cons of direct investment
- huge capital outlay - may need to borrow which increases gearing and risk of liquidity / lowers profits
- decentralised branches may take decisions that damage whole brand image e.g. promotion or unethical suppliers
- different org culture abroad which may create resistance and lower productivity?
meaning of an integrated and coordinated marketing strategy
BP MOB 4
brand image, product, market, objectives, budget, 4Ps
brand image - must meet customer expectations! e.g. would not expect gucci to be sold in walmart
product - will not use special offers to promote gucci, or advertise in a magazine about affordable living
market - e.g. industrial VS consumer; mass VS niche
budget- should have enough resources, should not overrun
4Ps - need to align with each other
examples of a strategy and tactics for the following objectives:
A - increase market share
B - increase sales by 50% in 3 years (fast growth!)
C - increase profit margins on cereal brand
A - market penetration; low price, increase promo and increase incentives to retailers
B - enter foreign markets through agents; adapt to local needs, language on packaging, promo matches local culture
C - increase value added and establish premium brand image; promo focused on healthy and high quality ingredients, higher price, change product appeal to health-conscious higher income groups
** when suggesting that business should sell abroad, also mention the method of entry - e.g. sell internationally through an agent, or through franchising
applications of IT in marketing
- internet - sell, advertise, reviews/photos/pics can make product more appealing
- mobile
- social media BUT need to use regularly and effectively to build presence and also risk of poor reviews
- in store - signage, POS systems track preferences based on inventories
affordable, wide reach, trackable impact and better customer service (instant)
applications of AI in marketing
- understand consumer needs by monitoring online browsing activity
- target ad campaigns more effectively based on social profiles and internet searches
- create consumer profiles that allow personalised marketing that may increase sales
- real-time interaction as consumers make purchase can influence what is bought
limitations of AI in marketing
- consumer and pressure group resistance due to data collection
- cost of systems and IT experts
- lack human creativity
6 main contents of marketing plan
- situational analysis - product portfolio, PEST+SWOT, market research
- marketing objectives (SMART)
- marketing strategy
- marketing tactics - coordinated marketing mix (4Ps)
- budget - must have sufficient finance
- time frame for implenting plan
time frame are important to provide discipline and focus
situational analysis - where is the business now in relation to the overall market?
examples of marketing objectives
- market share
- sales growth
- profit margins
- sales volume
examples of marketing strategies
- mass or niche
- industrial or consumer
- international entry
- market development - new segment
- market penetration
(Ansoff)
what is the key part of the strategic planning cycle you always forget?
REVIEW AND CONTROL!!!
did the outcome meet the objective? if not, make changes for the next time period
is a continuous process
positive impacts of globalisation on business
- greater sales growth potential if home market saturated
- greater EOS
- greater free trade reduces cost of imported infputs and the price of exports
- can source raw materials from cheaper countries and outsource to countries with cheaper labour,** reducing costs**
- easier to arrange M&A and joint ventures with foreign firms, which can allow faster external growth and better local marketing
- may allow pan-global strategy as differences become less obvious, which reduces costs of marketing (also EOS)
negative impacts of globalisation on business
- increased competition from abroad - may need to spend more on marketing OR lower prices and profits
- same marketing strategy - doesn’t meet different needs so may not increase sales
- anti-globalisation pressure groups - bad publcity due to cultural and environmental impact, so consumers boycott and reduce demand
eval - impact of globalisation
- extent of differences in consumer needs vital when choosing PG or GL strategy
- need to be flexible enough to meet changing needs/trends and cope with additional foreign competition
- opportunity for growth - can only do so much in domestic markets
importance of international marketing
- saturated home market - cannot keep growing
- profit opportunities - produce in country with low costs, then sell at higher price in high-income countries
- spread risk of economic downturn
- poor trading conditions at home
- legal differences creating opportunities - e.g. can’t sell tobacco freely in US but can in countries with weaker regulation
5 - profitable, but ethical issues?
Intl marketing NECESSARY for business that wants to keep growing, so could use this as an eval point in your answer - there is only so much that you can grow when restricted to one area
pros of pan-global marketing
- standard marketing strategy saves costs - exploit EOS, lower unit costs and prices
- standard brand identity - aids brand recognition and awareness, thus increasing trust and sales
cons of pan-global marketing
- cultural insensitivity - pressure group activity harms reputation, reduces sales
- will not meet different needs due to climate, religion or culture - leads to competitive disadvantage, fail to penetrate market and increase sales
- ignores income differences leading to inappropriate price (too high/low) so suboptimal profits
- legal restrictions on product and ads - limit sales growth
- ineffective translation of brand name into other langugages - offend, rep, lower sales
pros of of global-localisation
the opposite of pros for PG
cons of global-localisation
- higher marketing costs, reduced EOS due to duplication of functions
- loss of consistent brand image between markets - reduced brand recognition and awareness, lower sales
eval for PG vs GL
- depends on extent of difference - if significant, then cost of NOT adapting is greater than of doing so (reputation + failing to establish in market)
- depends on type of product - if luxury or mass appeal, PG and consistency is crucial as consumers EXPECT the same thing
- maintain a BALANCE - core aspects of product and marketing standardised, but slight variations in features to show cultural awareness and meet needs
