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CHAPTER 17 Marketing Strategy

Chapter 17 marketing personalized notes

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82 views4 pages

CHAPTER 17 Marketing Strategy

Chapter 17 marketing personalized notes

Uploaded by

123vinayakagarwalwow
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CHAPTER 17: MARKETING STRATEGY

Definition Of Marketing Strategy

A marketing strategy combines all elements of the marketing mix to formulate a plan to design,
produce, price, distribute and promote the product.
To first develop a marketing strategy, marketing objectives must be determined. These objectives
could be;
1. To increase the sales of existing products.
2. To develop and market a new product
3. To grow overall market share of products or specific product offered by the firm
4. Access a new market or develop a niche market
5. Maintain awareness on brand
6. Exit a market
But before marketing objectives can be determined, the firm must first identify their strength,
weakness, opportunities and threats (SWOT) using market research. What are they?

Strength
Strength refers to the advantage the firm has over their competitors, such as being able to access
exclusive materials or a good reputation. These advantages can be leveraged to build consumer's
confidence especially on new product launch. Apple Inc. has built a large following from their
reputation for good customer service and quality product. This enables Apple to price their
product at premium with high pre-order sales.

Weakness
Every firm has their weakness. These weaknesses make the company vulnerable to competition.
As such, it would be good for the firm to identify and take action to overcome these weaknesses
or conceal it from competitors. Example, if the product has a PED that is elastic, the firm must
prepare for a significant loss of revenue due to reduced demand should there be price changes by
competitors and market changes.

Opportunities
Some products can be developed to offer different services using their existing product. For
example, Uber started off as a ride-hailing service, that has now included food delivery
(UberEATS). This strategy was similarly adopted by their competitor Grab, who subsequently
introduced Grab Food and even expanded to offer Motorcycle hailing services (Grab Rider) in
traffic congested cities like Jakarta. All these services are available in a single "Super App". By
leveraging on opportunities, firms are able to diversity and widen their product portfolio, further
reducing business risk failure.

Threats
To your competitor, threats to your firm creates opportunities for them. Tax breaks offered to
your competitor is a threat to your firm, as your competitor may use the excess profits to launch a
new product or increase promotion of their product, causing your firm to lose market share. After
conducting a SWOT analysis, the firm can then determine it's marketing objective and include the
analysis outcome into the four marketing mix element to formulate a marketing strategy.
The nature and impact of legal controls related to marketing
Legal controls on marketing

Legal controls on marketing are meant to protect consumers from being misled by marketing
activities. In general, the consumer protection laws in each country protect consumers from;
1. Selling a product that is unsafe for consumption
2. Products that are below the quality expected and claimed by seller
3. Misleading or inaccurate information on packaging
4. Inaccurate weight or quantity of product
5. Banned or illegal substance in product
6. Unmet warranty conditions promised to customers
7. Indecent or offensive advertising
8. Falsifying claim of purchase

Producers or distributors must ensure that they meet the minimum legal standards in the
country where they sell their products.
Why businesses enter new markets abroad?

• Low trade barriers – low trade barrier allows businesses to easily and profitably trade
between countries.
• Home markets are saturated – demand for the product are no longer growing the
country.
• Other countries developing – New markets opens up abroad as other countries become
more developed.

Problems of entering foreign markets:


• Difference in language and culture: It may be difficult to communicate with people in
other countries because of language barriers and as for culture, different images, colors and
symbols have different meanings and importance in different places. For example,
McDonald’s had to make its menu more vegetarian in Indian markets
• Lack of market knowledge: The business won’t know much about the market it is
entering and the customers won’t be familiar with the new business brand, and so getting
established in the market will be difficult and expensive
• Economic differences: The cost and prices may be lower or higher in different countries
so businesses may not be able to sell the product at the price which will give them a profit
• High transport costs
• Social differences: Different people will have different needs and wants from people in
other countries, and so the product may not be successful in all countries
• Difference in legal controls to protect consumers: The business may have to spend more
money on producing the products in a way that complies with that country’s laws.

How to overcome such problems:


• Joint venture: an agreement between two or more businesses to work together on a
project. The foreign business will work with a domestic business in the same industry.
Eg: Japan’s Suzuki Motor Corporation created a joint venture with India’s Maruti Udyog
Limited to form Maruti Suzuki, a highly successful car manufacturing project in India.

Advantages:
•
• Reduces risks and cuts costs
• Each business brings different expertise to the joint venture
• The market potential for all the businesses in the joint venture is increased
• Market and product knowledge can be shared to the benefit of the businesses

Disadvantages:
• Any mistakes made will reflect on all parties in the joint venture, which may
damage their reputations
• The decision-making process may be ineffective due to different business culture
or different styles of leadership

• Franchise/License: the owner of a business (the franchisor) grants a license to another


person or business (the franchisee) to use their business idea – often in a specific
geographical area. Fast food companies such as McDonald’s and Subway operate around
the globe through lots of franchises in different countries.
• Licensing – Business in country X can sell the license of their product to a business in
country Y, This can avoid transport costs and trade barriers

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