Marketing Strategy

Question 1

pros of marketing planning

Answer 1

1. reduces risk of failure of novel strategies as clear objectives are set, research undertaken, coordinated strategy used and budget is made
2. gives direction to departments to coordinate and work towards objective set

Question 2

cons of marketing planning

Answer 2

1. small business may not have skilled managers with expertise to produce effective plan or the resources to conduct good market research
2. is only a plan and can be affected by changing market conditions

Question 3

eval marketing plans

Answer 3

1. depends on skill of who created it
2. must be flexible to adapt to dynamic market
3. depends on quality of market research it was based on - will lead to appropriate strategies being used

Question 4

what are the methods of entry in intl markets?

Answer 4

• export (direct and indirect)
• franchising
• licensing
• FDI in subsidiaries
• joint ventures

Question 5

marketing strategies need to be…

USE FOR EVAL

Answer 5

CONSISTENT
COORDINATED
FOCUSED

Question 6

pros of exporting directly

Answer 6

1. control over marketing
2. control over production quality
3. no commission to intermediaries so profit margins intact
4. 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

Question 7

cons of exporting directly

Answer 7

1. Trade barriers like tariffs - more expensive for market so lower demand
2. transport costs may offset any price/cost advantage
3. Retailers may not prioritise sale of product/ prioritise other companies’ products - sales may not grow quickly
4. 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

Question 8

pros of exporting indirectly (agent)

Answer 8

• 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

Question 9

cons of exporting indirectly

Answer 9

• 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

Question 10

pros of international franchising

Answer 10

• 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

Question 11

cons of franchising

Answer 11

• 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

Question 12

pros of becoming franchisee

Answer 12

• 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

Question 13

cons of becoming a franchisee

Answer 13

• 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

Question 14

should you become a franchisee? depends on

Answer 14

1. size of fee
2. size of cut of profits
3. appetite for risk - could set up your own
4. objectives - if creativity important
5. available finances and cost of other growth methods
6. economic climate - established brand names more successful during recession

Question 15

should you franchise your business? depends on

Answer 15

• 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

Question 16

pros of joint ventures

Answer 16

• 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

Question 17

cons of joint ventures

Answer 17

• 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

Question 18

pros of licensing

Answer 18

• 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

Question 19

cons of licensing

Answer 19

• 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

Question 20

pros of direct investment

Answer 20

1. retain full control over operation quality and marketing; also unlike merger or joint venture
2. profits not shared
3. may allow for vertical integration with suppliers/retailers - reducing risk in supply chain
4. could decentralise, which will make you more responsive to local needs

Question 21

cons of direct investment

Answer 21

1. huge capital outlay - may need to borrow which increases gearing and risk of liquidity / lowers profits
2. decentralised branches may take decisions that damage whole brand image e.g. promotion or unethical suppliers
3. different org culture abroad which may create resistance and lower productivity?

Question 22

meaning of an integrated and coordinated marketing strategy

Answer 22

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

Question 23

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

Answer 23

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

Question 24

applications of IT in marketing

Answer 24

• internet - sell, advertise, reviews/photos/pics can make product more appealing
• email
• 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)

Question 25

applications of AI in marketing

Answer 25

• 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

Question 26

limitations of AI in marketing

Answer 26

• consumer and pressure group resistance due to data collection
• cost of systems and IT experts
• lack human creativity

Question 27

6 main contents of marketing plan

Answer 27

• 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?

Question 28

examples of marketing objectives

Answer 28

• market share
• sales growth
• profit margins
• sales volume

Question 29

examples of marketing strategies

Answer 29

• mass or niche
• industrial or consumer
• international entry
• market development - new segment
• market penetration

(Ansoff)

Question 30

what is the key part of the strategic planning cycle you always forget?

Answer 30

REVIEW AND CONTROL!!!

did the outcome meet the objective? if not, make changes for the next time period

is a continuous process

Question 31

positive impacts of globalisation on business

Answer 31

1. greater sales growth potential if home market saturated
2. greater EOS
3. greater free trade reduces cost of imported infputs and the price of exports
4. can source raw materials from cheaper countries and outsource to countries with cheaper labour,** reducing costs**
5. easier to arrange M&A and joint ventures with foreign firms, which can allow faster external growth and better local marketing
6. may allow pan-global strategy as differences become less obvious, which reduces costs of marketing (also EOS)

Question 32

negative impacts of globalisation on business

Answer 32

1. increased competition from abroad - may need to spend more on marketing OR lower prices and profits
2. same marketing strategy - doesn’t meet different needs so may not increase sales
3. anti-globalisation pressure groups - bad publcity due to cultural and environmental impact, so consumers boycott and reduce demand

Question 33

eval - impact of globalisation

Answer 33

1. extent of differences in consumer needs vital when choosing PG or GL strategy
2. need to be flexible enough to meet changing needs/trends and cope with additional foreign competition
3. opportunity for growth - can only do so much in domestic markets

Question 34

importance of international marketing

Answer 34

1. saturated home market - cannot keep growing
2. profit opportunities - produce in country with low costs, then sell at higher price in high-income countries
3. spread risk of economic downturn
4. poor trading conditions at home
5. 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

Question 35

pros of pan-global marketing

Answer 35

1. standard marketing strategy saves costs - exploit EOS, lower unit costs and prices
2. standard brand identity - aids brand recognition and awareness, thus increasing trust and sales

Question 36

cons of pan-global marketing

Answer 36

1. cultural insensitivity - pressure group activity harms reputation, reduces sales
2. will not meet different needs due to climate, religion or culture - leads to competitive disadvantage, fail to penetrate market and increase sales
3. ignores income differences leading to inappropriate price (too high/low) so suboptimal profits
4. legal restrictions on product and ads - limit sales growth
5. ineffective translation of brand name into other langugages - offend, rep, lower sales

Question 37

pros of of global-localisation

Answer 37

the opposite of pros for PG

Question 38

cons of global-localisation

Answer 38

1. higher marketing costs, reduced EOS due to duplication of functions
2. loss of consistent brand image between markets - reduced brand recognition and awareness, lower sales

Question 39

eval for PG vs GL

Answer 39

1. depends on extent of difference - if significant, then cost of NOT adapting is greater than of doing so (reputation + failing to establish in market)
2. depends on type of product - if luxury or mass appeal, PG and consistency is crucial as consumers EXPECT the same thing
3. maintain a BALANCE - core aspects of product and marketing standardised, but slight variations in features to show cultural awareness and meet needs