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CHAPTER 22 - MARKETING STRATEGY - Coggle Diagram

- - - - 01 - PURPOSE AND MISSION
        
        02 - SITUATIONAL ANALYSIS
        
        03 - MARKETING OBJECTIVES
        
        04 - MARKETING STRATEGY
        
        05 - MARKETING MIX
        
        06 - MARKETING BUDGET
        
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        the marketing plan gives details of the specific marketing tactics that will be used as part of the coordinated strategy
        
        these tactics are the 4Ps of marketing mix and details in the marketing plan include:
        01 - product - the USP and main differentiating factor
        02 - price - whether skimming or penetration pricing
        03 - promotion - the methods to be used
        04- place - the main distibution channels to be used
        
        the market plan should explain how the 4Ps are linked and coordinated with each other and how they should work together to achieve the marketing objectives
        
        this section of the plan analyses how the business intends to achieve its marketing objectives
        
        marketing strategy could include:
        01 - mass or niche marketing
        02 - selling to existing markets and consumers
        03 - selling to a new market segment
        04 - developing new markets (in other countries)
        
        the next question a marketing plan should provide an answer to is:
        where they want to be ? all marketing strategies need clear marketing objectives to focus on
        
        these objectives should be SMART so that progress towards achieving them can be monitored at regular intervals
        
        marketing objectives can be expressed in terms of:
        01 - sales level reached at given date
        02 - market share budget
        03 - rate of sales growth
        04 - profit margin targets for the new product
        
        where the business is now - this is an important question to answer in the marketing plan
        
        01 - to develop effective new marketing strategies, it is essential to know about the following:
        a - current product portfolio
        b - market research into the target market (consumer profiles)
        c - competitor analysis - how many are there and their marketing mix (Porters five forces model)
        d - the economic and political environment - a PEST analysis or SWOT analysis
        
        Purpose of the plan and mission of the business
        
        01- this section of the plan gives information about the plans purpose
        02 - ex --> is it part of a proposal for a new business or to prepare for the launch of a new product
        03 - this mission statement and other background information about the business helps users of the report to understand where the marketing plan fits in with the existing business.
- - - - the marketing strategy must be completely coordinated
        
        all marketing actvities in the strategy need to be tied together so that a consistent message is communicated to consumers or potential customers
        
        examples of the need for link parts of the strategy include:
        
        01 -the marketing mix must be coordinated with the marketing objective
        02 - promotion tactics must be coordinated with the marketing budget
        03 - marketing mix decisions need to be coordinated together so that the 4Ps are aligned wtih each other
    - - the importance of measurable marketing objectives to the overall marketing plan cannot be overstressed
        
        marketing strategies must be focused on achieving clear, specific marketing objectives
        
        different marketing objectives will require different strategies.
        for ex --> a breakfast cereal producer could set very different marketing objectives for one of its major brands
        
        each objective will require different marketing strategies
        
        EXAMPLE 02
        
        MARKETING OBJECTIVE - INCREASE TOTAL SALES BY 50% IN 3 YEARS
        
        02 - MARKETING STRATEGY - market the product in foreign markets by sell through agents in those countries
        
        03 - MAIN MARTKETING MIX TACTICS - 01 - change product taste for different consumer preferences
        02 - use different languages on the packaging
        03 - match promotions for local culture
        
        EXAMPLE 03
        
        MARKETING OBJECTIVE - INCREASE PROFIT MARGINS OF THE BRAND
        
        02 - MARKETING STRATEGY - USE AN INTEGRATE STRATEGY TO INCREASE ADDED VALUE AND ESTABLISH A PREMIUM BRANDED IMAGE
        
        03 - MAIN MARTKETING MIX TACTICS - 01 - Focus promotions on quality and healthy ingredients
        02 - change the product recipe to appeal to health conscious higher income groups
        03 - change the price
        
        EXAMPLE 01
        
        MARKETING OBJECTIVE - INCREASING MARKET SHARE OF EXISTING NATIONAL MARKET BY 30% IN 2 YEARS
        
        02 - MARKETING STRATEGY - USE AN INTERGRATED STRATEGY TO PENETRATE THE MARKET
        
        03 - MAIN MARTKETING MIX TACTICS - 01 - lower the price
        02 - increase promotions
        03 - increase incentives to retailers to sell the brand
    - - A marketing strategy must be consistent with quality, quantity and the message the marketing activities are trying to potray
        
        in particular a new business strategy should be consistent with:
        
        a - THE BUSINESS- the image of the business and it brand indentity must be reflected in its marketing strategies. if the strategy is completely different to customers exisitng perceptions, then the message will be confused and misleading.
        b - THE PRODUCT - the nature and planned image of the product should be clearly supported by promotional methods and messages used in the marketing strategy
        c - THE MARKET - the marketing strategy should reflect the nature of the target market, for ex --> an industrial market will need different marketing strategy to a consumer market whilie a niche market approach will require a different strategy to a mass marketing appraoch
    - - 01 - INTERNET (websites are business necisities,features products, communications and reviews and videos and photos that attract potential consumers
        02 - EMAILS - (opt in email liste give them a large base of customers who have already have an interest in their products, email marketing can be an effective way to announce new products or inform of new features of an existing one) its afforabdle and engaging way to market a product to increase sales
        03 - MOBILE - ( reaching customers through text messaging and applications, sending them special coupons and dealsto consumers on marketing lists, for ex --> a business may maintain a profile on a social media smartphone application that offers 20% discount if they buy a new product)
        04 - IN STORE - (digital signage allows businesses to capture the attention of customers and market specific products to them. helps in restaurants and other businesses that need to respond to changes in inventory or introduce new products on a regular basis. )
        05 - SOCIAL MEDIA - both an opportunity and a challenge for businesses when it comes to product marketing. it can be an quick and easy to communicate information on new products to a large audience. However businesses need to use it regularly and effectively to attract cusotmer. social media communication is equivalent to the old marketing technique word of mouth. aim is to create an appeal social media experience and communicate regularly with consumers and share information about the product).
    - - ability for marketing managers to draw conclusions from vast amounts of data from ai
        
        ai manager will assume greater importance to marketing in years to come but right now AI can achieve these-
        
        01 - Monitoring what consumers are buying reading and watching on social media to gain a complete understanding. this data allows marketing mangers to quickly modify a message or special offer to meet consumer preferences
        02 - optimize the effectiveness of digital advertising campaigns - this is done by analysing consumer word searches, social profiles and online data. after this, effective promotions can be directed at consumers
        03 - create detailed consumer profiles so that the message can be sent to the individual at the right time, using the right media. this personalisation type is a greate AI analysis
        04 - AI analysis of consumer related data to indentify trends to allow brand marketing to interact with consumers aexactly when they are making purchasing decisions
        
        Limitations to AI -
        01 - consumer resistance towards data being collected and used can lead to pressure group acitvity against businesses dependant on big data
        02 - management supervision and control is still required
        03 - it needs significant investments in data collection, IT expertise and computing power
        04 - at present AI computing system lack human creativity and imgination
- - - - much of this collaboration is due to creating free-trade agreements as they reduce or eliminated tariffs and quotas on imports
      - ECONOMIC COLLABORATION - countries working together to achieve common aims, such as free international trade.
      - FREE-TRADE AGREEMENTS - agreements made between countries (or trading blocs of countries) to reduce or eliminate trade barriers such as import tariffs and quotas.
      - THE KEY FEATURES OF GLOBALISATION THAT HAVE AN IMPACT ON BUSINESS STRATEGY =
        01 - increased international trade - free-trade agreements
        02 - growth of multinational businesses in all countries as there is greater freedom for capital to be invested form one country to another
        03 - free movement of workers between countries
    - - 01 - for many businesses, international marketing is now an opportunity, for profitability to expand their sales
        02 - for many businesses, it is no longer an option to remain based in one country if they aim to achieve growth
        03 - the rapid development of major developing countries (BRICS) is also leading to a huge marketing opportunities for businesses prepared to sell theri products and services in these international markets
        
        BRICS - acronym for the five developing economies with great market opportunities: Brazil, Russia, India, China, and South Africa.
        
        INTERNATIONAL MARKETING - selling products in markets other than the original domestic market.
        
        INTERNATIONAL MARKETS - IDENTIFICATION, SELECTION, AND ENTRY
        
        moving into an international market is a major strategic decision for a business
        
        it should not be taken without adequate research
        
        4 stages of decision-making processes to which foreign country to sell products in how to sell them in this new market
        
        01 - IDENTIFY POTENTIAL SUITABLE MARKETS -
        this is done by researching the GDP, GDP per head (standard of living), languages spoken, main cultural influences, and geographic factors
        02 - SCREEN POTENTIAL MARKETS - once potential markets have been identified, they must be carefully screened and the features of them fully researched, this means considering a wide range of issues such as political stability, currency stability, and the size of the potential market, the number of strength of competitors, the cost of transportation, the location in each country and the distributional channels available
        03 - SELECT THE MARKET TO ENTER - shortlist of the most suitable markets is drawn up. the marketing managers should visit each one, meet with the potential retailers and distributors and analyse other foreign companies rate of success in each country, a final decision is made on all the data gathered and analysed
        04 - ENTER THE NEW MARKET - the business needs to decide on the best marketing strategies to sell the product successfully in the new market
        
        INTERNATIONAL MARKETING STRATEGIES
        
        one feature of globalisation is that national and regional differences in taste, culture and fashion and wants are becoming less obvious
        
        the world is becoming more standardised in the goods and services it is demanding
        
        if this is true then they are great opportunities for companies to use technology to gain massive economies of scale by selling the product world wide
        
        other writers suggest that substantial differences still exist in consumer needs in different countries markets
        
        standardisation is only one option for entering these markets, and sometimes this will fail
        
        the alternative are for business to adopt a global marketing mix to suit local needs and conditions
        
        this is called localisation and aims to maintain local differences in the marketing of products
        
        these two approaches are know as PAN-GLOBAL and GLOBAL LOCALISATION strategies
        
        PAN-GLOBAL MARKETING - marketing a standardized product across the globe, as if the entire world were a single market, selling the same product in the same way everywhere.
        
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        growing concern about cultural imperialism from the US and UK businesses and an anti-globalisation movement against them
        
        inceasing scope for businesses to benefit from adapting and selling products geared directly towards particular cultural, religous and consumer requiremments of each country
        
        the political and cultural backlash experienced in some countriees by multinational giants for trying to use one strategy suits all
        
        these multinationals are now realising the importance of developing slightly different strategies and products to suit diverse communities around the world, even if it adds to total costs
        
        changes are made to the marketing mix to reflect local and regional difference, the more closer it becomes to global localisation
        
        -pan-global marketing may continue to be important for two group of particular
        
        first is upmarket brands with internation appeal such as rolex watches and rolls royce - this is because consumers would not likely these to be adapted to be suited to their needs as the want the opportunity to buy the same products as famous actors or celebrities is the key promise made by these brands.
        
        second is mass appeal brand such as levi and Apple which have substantial opportunities for global campaigns and standardised products and economies of scale result from this
        
        KEY FACTS ABOUT GLOBAL LOCALISATION
        01 - approach can be summed up to - think global act local strategy
        02 - the worlds largest food brands like pizza hut has adopted this approach to great success
        03 - it offers all of its global franchises and branches the benefits and security of a giant multinational cooperation
        04 - however, it diffentiates most aspects of its marketing mix between countries and markets
        for ex --> in china, it sells products that are not available in other countries to suit local consumers taste, so although it was the first company to introduce chinese to pizza the best selling lines todya include crayfish burgers
        
        05 - price levels are varied between different countries to reflect the difference in average incomes
        06 - advertisement contain always their own local people
        07- distributions and places are being tested too for example they have introduce china to quick-service restaurants offering authentic chines foods in surrond design in a local style
        
        BENEFITS OF GLOBAL LOCALISATION -
        01 - local needs, tastes and culture are reflected in the marketing mix of the business of the business and this could lead to higher sales and profits
        02 - there is no attempt impose foreign brands, products or advertisments on regional markets
        03 - the products are more likely to meet local national legal requirements than if they are standardised products
        04 - there will be less local political and pressure group opposition to this type of multinational business activity
        
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        CHOOSING THE STRATEGY TO DEVELOP A GLOBAL MARKET
        
        The choice of strategy will be influenced by differences between the existing national market and the target global markets.
        The greater these differences are, the greater the need for a localised strategy and not a pan-global strategy.
        
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        WHY IS INTERNATIONAL MARKETING IMPORTANT FOR SO MANY BUSINESSES ?
        01 - SATURATED HOME MARKETS - one country can only have so many fast-food restaurants, for ex --> when the market stops growing and competition is severs, a move to another country, with few large competitors can offer rapid sales increase
        02 - PROFIT OPPORTUNITIES - rapid sales growth may be combined with low costs of operation and create high profitability, if a business produces in a country with low labour and property costs and low tax levels, it can gain higher profit margins by selling at high prices in high-income countries. the great wealth of some nations such Arab countries provides some luxury goods producers with the opportunity to sell at higher prices than in their domestic markets
        03 - SPREADING RISKS - international marketing means sales and profits of a business are much less dependent on the economic and legal constraints in the home country
        04 - POOR TRADING CONDITIONS - ex --> greece in 2019 sales of luxury product fell due to the economic austerity crisis but sales of luxury goods in china continued to increase
        05 - LEGAL DIFFERENCES CREATING OPPORTUNITIES ABROAD - strict legal controlls on the selling and advertisment of tobacco products in the EU have encourages most cigarette manufacturers to target their selling to emerging market economies with fewer restriction. while it is profitable, it may seem unethical.
  - - - 01 - EXPORTING PRODUCTS
        
        01 - exporting can be undertaken by selling the product directly to a foreign customer
        02 - this happens with online e-commerce sales
        03 - direct exporting is also commonly used for large and expensive items of capital equipment such as aircraft sold to business consumers
        04 - alternatively the exporting business could set up its own marketing division in each target country
        05 - exporting can also be done indirectly through international trade agents or trading companies
        06 - these intermediaries specialise in managing the sale of products from businesses that may not know the target country well
        
        BENEFITS OF EXPORTING DIRECTLY
        01 - the business has complete over the international marketing of its product
        02 - agents and trade companies may represent several other companies exporting goods, so many do not give priority to. a new exporting business and its products
        03 - no comission is taken by intermediaries so profit margins are not reduced
        
        LIMITATIONS OF EXPORTING INDIRECTLY
        01 - the business will need dedicated sales personnel dealing with foreign buyers. managment may have to travel abroad to meet customers, if the size of contracts justifies this.
        02 - the business does not have a local agent supporting them so may lack important local knowledge such as about import controls
        03 - the exporting business has to handle the logistics of transporting and storing the product and dealing with all paperwork
        
        BENEFITS OF EXPORTING INDIRECTLY -
        01 - the overseas agent and trading compant has local knowledge and contracts with potential customers, which should aid the marketing of the product
        02 - transport and administrative procedures become the responsibility of the agent
        03 - it may be cheaper for the exporting firm as fewer employees are involved in selling abroad and fewer visits from senior managers will be needed
        
        LIMITATIONS OF EXPORTING DIRECTLY
        01 - commission or payment will have to be paid to the agent or trading company, reducing the exporting firm's profit margin
        
        02 - the intemediary will have other products, perhaps from compeittors to sell as well - how much focus and effort will be give to selling products of one business ?
        
        02 - INTERNATIONAL FRANCHISING
        
        means that foreign franchises are used to operate a firms activities abroad -
        this can take the form of one foreign company being used as a franchise for all branches in their own country
        
        Mcdonalds have one franchisee business to operate all of its branches in argentina
        
        another option is for individual franchises to be appointed to operate each outlet
        
        ADVANTAGES OF INTERNATION FRANCHISING -
        01 global expansion - it allows you to grow your franchised brand presence into new markets and help your franchise's increase their recognition
        02 - access to local market knowledge - franchiseee understand local cultures, taste and consumer behaviour better
        03 - steady income steam - the franchisor earns ongoing royalties and fees from franchisees
        
        DISADVANTAGES OF INTERNATIONAL FRANCHISING
        01 - CONTROL ISSUES - maintaining a consistent brand quality and standards across different countries is difficult
        02 - CULTURAL AND LEGAL BARRIERS - different business laws, languages and customs complicate operations
        03 - REPUTATIONAL RISK - poor performance by one franchise can damage the global brand image
        
        03 - JOINT VENTURE
        
        Combining the resources and expetise of two otherwise unrelated companies in the same industry
        
        BENEFITS OF JOINT VENTURES
        01 - Helps the business grow faster, increasing productivity and profits
        02 - access to new markets and channels of distribution
        03 - increased capacity
        04 - access to greater resources capital and new advancements of technology
        05- access to local knowledge and expertise including specialised staff
        
        LIMITATIONS OF JOINT VENTURE
        01 - the communication between partnering companies is not so great
        02 - objectives of the venture are unclear
        03 - the different culture and management stlyes pose barriers to cooperation
        04 - the work and resources are not distributed equally
        
        04 - LICENSING
        
        Licensing allows another business in foreign country to produce the branded goods or patented products under license
        
        ADVANTAGES OF LICENSING
        01 - goods do not have to be physically exported saving time and transport costs and making products fresher too if they are perishable goods
        02 - this will involve strict controls over quality
        03 - the business selling the license avoids the capital cost of setting up its own operations abroad
        
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        05 - DIRECT INVESTMENT IN FOREIGN SUBSIDIARIES
        
        a company that is owned or controlled by a parent company but operates as a separate, legal entity in a different country.
        
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