Market Strategies and Growth, Market Positioning, Segmentation and Targeting - Assignment Example

Abstract This paper looks at various aspects of marketing and answers to critical questions on various areas. The paper answers questions on market strategies and growth, market positioning, segmentation and targeting. The papers also look at market models for example BCG and their limitations Keywords; strategy, growth, market Module 1 and 2. 1) Hierarchy of strategies and its importance to Carco There are three hierarchical levels of strategies, which are considered to be an important concept for Carco. They are the corporate level, the business unit level and the departmental or functional level. The corporate level is important to Carco because it will be in charge of selecting the part of the business to compete in, for example on the model of cars. It will also concern itself with the coordination and development of that business portfolio (Seidl, 2013). The business level unit may be a department, product line, division or profit centre whose plans can be done independent of the rest in a firm. This level will be involved in positioning the organization against its key rivals, forecasting the changes in customer demand and other technologies and adjusting the business to accommodate them and finally, influencing the kind of completion in the market by strategic actions like vertical integration and by using such political actions as lobbying (Seidl, 2013). The functional level unit will be important to Carco as this only focuses on the operating aspects of both departments and divisions within the firm. The major focus here is on the value chain and business processes. Through this level the marketing, finance and the human resources will work effectively and efficiently. This level is critical as it offers the higher levels the information on resources for proper functioning of such levels to achieve the goals of the organization as a whole (Seidl, 2013). 2) The Significance of Alternative Corporate Growth Matrix Strategies for Carco Ansoff Matrix In his quest to portray alternative strategies for corporate growth, Ansoff come up with a matrix whose main focus is on the organization’s present and potential markets and products. The matrix considers the ways that an organization can conduct expansion activities by use of new and existing products. The matrix has four product combinations (Seidl, 2013). Existing products New products Existing markets Market penetration Product development New markets Market development diversification The matrix has four growth strategies Market penetration, the organization utilizes its current products to achieve growth. This is done by the firm in the market segments that they presently occupy. This is aimed at increasing the existing market share (Seidl, 2013). Market development, the organization in this case enters new market segments with their present products in their quest to achieve growth. Product development, the organization comes up with new products whose target is new markets. Diversification, in this case the organization seeks growth by coming up with new products and introducing them to newer markets. 3) The Relevance of Porter’s Five Forces Model for Carco The five force model by porter is critical given that they will determine the nature of the industry competition. The first force is that of a threat of a new entrant into the industry. This will help Carco to analyze the kind of market that is likely to be gained by the entrant the intensity of the rivalry. The company will be able to determine the kind of barriers that have been placed or the barriers that they can put up with to bar competitors. They will use these forces to analyze the bargaining powers of the supplies. If the suppliers enjoy some powers, they will exercise such powers, supply their products at exorbitant prices and squeeze the profits of an industry. These forces will help Carco Company to determine the bargaining powers of the customers. If customers are powerful, they will drive the prices down and demand more quality products at a much lower price. The company will be able to analyze any threat that might be caused by substitutes and finally, Carco Company will use these forces to establish the degree of competitive rivalry. This rivalry will determine the price wars in the market, investing in more innovative products and the intensity of sales promotion. The effect of the above activities is to increase the costs and reduce the profits. 4) Are Macro And Micro Forces Affecting The Car Industry? Excess capacity, the global production of the light vehicle has highly exceeded the production of trucks and cars globally. Pricing pressure, due to the recent proliferation of more and new products in the market coupled with excess capacity has kept the pressure on the manufacturers to price their products high in order to cover up for the cost and make reasonable profits. Consumer spending trends, It has been noted in mature markets that consumer’s propensity to purchase will lead them to eventually buy high end cars with more features expensively. That means that the inability by the manufacturers to increase prices currently will be compensated in the future. Commodity price increase, the rises in prices for resins and steel that are majorly used in the automotive industry have been responded to by an increased manufacture of these materials. This is expected to moderate the pricing trends in the intermediate term. This is conducted in respect to the volatility of the currency exchange for those firms that use foreign currencies. 5) Relevance of Marketing Segmentation, Targeting, Differentiation and Positioning Segmentation Market segmentation is the dividing of the markets into some distinct buyer groups with differing characteristics, needs, behavior and those that might require separate programs or products. A segment is a group of consumers who respond in a similar manner to a set of efforts by the seller. This will be relevant to Carco Company because it will be used to determine the size of the market in different ways that might include; whether they reach it and serve it, whether it will be profitable or large enough to serve, whether the segments are distinguishable and whether programs that are more effective can be designed to attract and serve more segments (Egan, 2012). Targeting Targeting deals with segment evaluation and choosing one that attracts more. This will be relevant to carco as the company will use it to determine the size of the market and its growth prospects, establish the structural attractiveness of the market and match this with the resources and objectives of the company (Egan, 2012). Differentiation and Positioning Product positioning is the consumer’s definition on a product’s important attributes. It is depended on the place that the product occupies in the mind of the consumer as compared to other competing products. This will be relevant to carco because they will use it to determine the competitive advantages that are differentiating on which a position should be developed. It can also be used to identify and choose the right competitive advantages and in selecting the best overall positioning strategy. Chapter 1 1) Important Information For Marketing Planning The geographic information, this will focus on the nations, the states cities and regions where the organization is willing to carry on business. Demographic information, this information concerns the age of the consumers in a market, the gender, family size and its life cycle, the income level, race, nationality and the occupation of targeted market Psychographic information, this is information on social class of the market, the socio economic, life style and values of the market and the targeted consumers’ personality characteristics. Behavioral information, this is information on for example on occasions like valentine’s day, the benefit type sought, the user status and rate, the attitudes towards the products from users and the loyalty status. 2) Limitations of BCG Portfolio Model The matrix of BCG classifies businesses as either low or high. In this case, there is no true reflection of the business as businesses may be at the medium level. There is no clear definition of market in this model It is not true always that a large market share will lead to high profits. This is because large market share incur more costs The market share and the rate of growth cannot exclusively be the indicators of profitability. The BCG matrix model overlooks and ignores other profitability indicators. Sometimes other businesses may gain competitive advantage by the help of dogs. This means that they can even gain more than the cash cows. This approach of four cells has been criticized as simplistic. Chapter 2 1) Forward Vertical Integration and Backward Vertical Integration Forward vertical integration is a strategy that is used by the firm to gain increased control and ownership over the previous customers. The company can integrate after taking into consideration the costs and the scope of the firm. Example of Forward vertical integration Raw materials Intermediate goods Manufacturing Marketing sales After sales services In the above case, the organisation moves from raw materials downwards to after sales services. Backward vertical integration is a strategy that is used by the firm to gain increased control and ownership over the previous suppliers (Egan, 2012). In this case, the movement would move from down going up unlike in the above example. 2) Limitations of Value Based Management Value based management is an approach used in management to ensure consistence management of corporations on value. Limitations Value creation sound simple as compared to corporate strategy, extreme caution is needed so as to avoid measuring wrong things that might result into value destruction, value based only requires explicit board support and chief executive, costly comprehensive training are required, and finally any model used in this approach is never perfect, therefore there are expected draw backs (Egan, 2012). Chapter 3 1) Ways in which business strategies differ in scope, objectives resource deployments and synergy across prospectors, analysers and defenders Scope, focuses on the types and number of industries, the market segment and the product line that it plans to enter. The goals and objectives will focus on the volume growth, return on investment and profit contribution. The resource deployment is focused on the ways of obtaining resources and allocating them and the synergy will focus on reinforcing and complementing one another, and educating organizational members that total output is greater when produced together than in doing in parts (Seidl, 2013).. 2) The role of the internet in the formulation of effective business strategies and their marketing implications Pricing strategy, the pricing of the firm is greatly influenced by the internet. Consumers are able to get more information, this increases competition and number of suppliers. In terms of distribution, there is greater convenience in online shopping. The disadvantage with this is the time lag between ordering and delivering. The impact on communication is that the internet is now used to reach many stakeholders and deliver information (Seidl, 2013). Chapter 4 1) Carbon Tax Carbon tax will lead to increased commodity prices rising from the fact that the producers would want to caution themselves against this cost. This means that the consumers will respond to this by decreasing their consumption because of increased commodity prices (Seidl, 2013). 2) Important environmental issues in the automotive industry The automotive industry must take into consideration issues like how environmental friendly the car will be in terms of carbon emission and fuel consumption efficiency. This will ensure that the final product will not only be environmental friendly but also save on the amount of fuel to be consumed (Seidl, 2013). Chapter 5 1) Characteristics of Individual Adopter Groups Innovation, Innovation is defined as an idea, object or practice that a unit of adoption or individual perceive as new (Egan, 2012). They have communication channels. This is the, means by which information is transmitted from one individual to another. Time conscious, the decision period of innovation is the time that is required to go through the decision process on innovation. The adoption rate is the speed with which members of a certain social group adopt an innovation. Social system in nature, a social system is a set of units are interrelated and work together to solve a problem with an ultimate aim of achieving an objective (Egan, 2012). 2) The Criteria to Be Used In Order to Increase Market Penetration of a Product Market penetration seeks to expand the current market share of its current goods and services. It seeks to increase revenue from its goods and services without effecting any changes on these goods and services. The criteria that can be used to increase the market penetration will include; Integrating the Strategy of the Sales Force with That of the Entire Organization The leaders of organizations should determine those lines of operation that are key, the targeted customers, the geographic aims and limits, the suppliers who are critical to the organization and the strengths and weaknesses of their organization(Egan, 2012). Selling and Marketing Departments Must Work Together There has to be a close contact between customers and employees. In well developed and mature markets, the key targeted and majority of customers will prefer customized marketing. This requires that the sales team must be integrated to the rest of the company (Egan, 2012). Sales Force Training and Development The manager in charge of the sales team must ensure that the team has been given proper training, constant analysis is done and corrective measures undertaken to keep team on course. The sales team should always be reminded that there main role is developing the business and not becoming program and product information experts (Egan, 2012). Matching the Compensation System with the Company Goals Compensation plans in mature markets need to reward things like target account results, the share of market in key product lines , the growth of products targeted and new account development. Chapter 6 1) Ethical Issues in Marketing Value oriented framework, there are ethical issues that are infringed for example honesty, privacy and transparency. Market research, the ethical issues here are stereotyping and invasion of privacy. The market audiences which target the vulnerable like children and the elderly and finally pricing ethical issues such as price fixing, price discrimination, price wars, bid rigging and price skimming (Grant, 2013). Advertising and promotion, ethical challenges are truth and honesty, taste and controversy and negative advertising. 2) Market Segment Definition by Entrepreneurial Ventures Market segmentation involves the identification of some characteristics of certain set of consumers that are unique from the rest. Market segmentation can be created depending on quality and price. There are those consumers who cannot be able to tell the difference between more quality and less quality. They get indifferent between the two. Given that the market niche for high quality and high priced products is smaller than products of less quality and price, the new ventures should utilize his market given their limited resources (Grant, 2013). Chapter 7 1) Important Determinant Attributes for Products/Service These are those aspects concerning the organization’s products and services that make consumers buy those products and services. They are quality, price, services and durability. Consumers want to have quality products that will give them value for their money. The products that they buy must be pocket friendly so that it is affordable to them. They also want their needs served by the services received from these products and those products that last long are desirable (Grant, 2013). 2) Challenges Associated With Repositioning Strategy Market repositioning is an important factor since it will create a new market and customer base. It means more customers will buy the products of the firm and this will eventually generate more revenue (Grant, 2013). Positioning comes from the eye of the beholder, it is determined by the place that the product or service occupies in the prospective buyer’s minds and not where the organization wants it to be (Grant, 2013). The positions that an organization may be targeting may have already been pre-empted by other firms, this will greatly hamper another firm that want to reposition in that market (Grant, 2013). Chapter 8 1) Pioneer and Follower Strategies The pioneer strategy will in the long term succeed if they create barriers to those entrants who come late, come up with competencies and resource that well established firms already in the market will prefer to acquire instead of building their own, avoid incurring high initial costs given that it is still early to market and avoid locking up the business in models that are not appropriate before a thorough understanding of the market (Egan, 2012). The follower strategies will in the long be successful if the follower exploits a competitive advantage that is powerful, by developing unmatched strong competency by sourcing for ideas that can reduce costs, by choosing a niche to dominate in and being fast in the market. 2) Mode of Global Market Entry That Is Most Appropriate For McDonalds McDonald is a pioneer in a global market, the best mode of entry that will keep him at the top is not to over-price, to be at the top with the most recent technology, cut down costs, and grow domestic markets while building new markets and revenue (Grant, 2013). Chapter 9 1) Difference between Strategic Choice for Share Leaders and Challenges in Growth Markets Share leaders make strategic choices to grow by introducing new products, changing prices, increasing the number of distribution outlets, intensifying promotion and advertising. The challenge in market growth would be the fact that the leader might not be the admiration of the market majority or respected even when it is obvious to everyone in the market that the leader is visibly present in the market (Grant, 2013). Competitors also offer challenges to the leader in the market. Another strategy that the leader can employ is looking up for new users and creating new uses for the product by the already existing customers. The leader needs to be unassailable in the market instead of defence from competitor attack. The leader innovates and comes up with new customer products and services. The market growth challenge is that the competitors come up with similar products and services. Other growth challenges will include launching new products without proper market planning and being lost in the market whereby the organization is completely not aware on what the competitors and the customers are up to (Egan, 2012). 2) Opportunities and Risks in Growth Markets There are numerous opportunities for growth in the market; the three main sources from where they come from are new and pervasive technologies. This can be tapped into by the organizations to reach more markets through advertising and communication. An example of this is the use of internet. Another opportunity is the increased spending by the middle class. This means that the middle class who are a main target by most firms have a higher purchasing power and this market can be tapped into. Lastly are the greater trading activities with other countries of the world (Egan, 2012). Business can even find more opportunities by determining what their comparative advantages are. This ensures that the businesses are only dealing with those products that they can easily produce without facing challenges. This will translate in to fewer costs and the outcome will be leading in the market due to reduced costs (Egan, 2012). Risks The major risks associated with market growth are the market volatility, speculative financial attacks and the commodity price volatility (Egan, 2012). Chapter 10 1) Importance of Transition Phase A transition market is a market that is changing from being centrally planned into a free market. During the transition phase, there is market liberalization. The prices are freely determined by the free force of demand and supply and there are also lowering of the trade barriers (Grant, 2013). There is also macroeconomic stabilization. This means that inflation is lowered over time and this leads to sustainable balance of payment (Grant, 2013). The phase is characterised by restructuring and privatization. This creates a financial sector that is viable and brings enterprise reformation thereby producing goods and services that are capable of being sold in free markets. There are also legal and institutional reforms. These redefine the state role in the economies by establishing the rule of law and also introduce policies governing competition policies (Egan, 2012). 2) Harvesting Strategy This is a planned strategy to discontinue the production of a product after getting maximum profits from the sale of this product at the end of its life cycle. The strategy works by completely getting rid of the marketing costs associated with the product and the product only sells on its good will up to a point t where its sales revenue falls well below the cut off point (Egan, 2012). Chapter 11 1) Virtual Goods and Virtual Markets Virtual are defined as objects that are in online communities and games. Examples of virtual goods include social online farming cows and seeds, weapons and online role playing games. The virtual goods have value; they are bought and sold in the virtual markets for real money by game players. Virtual markets are online markets (Egan, 2012). 2) Re- Organisation of Distribution Channels In Order To Suit Virtual Markets Distribution channels are re-organised in order to have the consumers get the products that they require. These channels have been re-organised to be part of the marketing mix, business’ promotion, price, combination of products and place. It should be noted that the way a consumer can buy and sell a product is affected by the distribution. Under virtual markets, distribution is mainly done by a virtual and an on-site store (Egan, 2012). Chapter 12 1) Differences Between Centralised And Decentralised Type Of Organisation Structures Centralization; In an organizational structure that is centralised, the top management reserve the authority to make decisions affecting the entire organization. Power is concentrated in the upper levels of the organization. It is more of an autocratic approach than democratic. All the power is at the top tier. In this type of structure, it is only a limited group of individuals that enjoy control in a wide spectrum (Grant, 2013). Some of the benefits of an organization that is centralized is the fact that there are clear policies and direction. The decision makers are also composed of experts who are capable of making critical decisions that require expert knowledge. However this system is less effective in problem solving as it only involves a few individuals (Grant, 2013). Decentralization In an organization that is decentralized, the power of decision making is held by both the upper and lower level management. The reporting line and lower level management continuously offer critical input to the upper level management for efficient and an inclusive management of the organization. It gives autonomy to all members of the organization. It is more democratic way of management (Grant, 2013). Some of the benefits of this type of organization are that employees own the objectives and conclusions that result from decisions that they participated in making. There is increased employee morale. Given that there is first hand information available to the employees, better choices are easily made. The system becomes risky in circumstances when the staff depended upon does not have the required expert decision making skills (Grant, 2013). 2) Essential Criteria On The Basis Of Planning And Organizational Structure For Differentiating Between Product And Service Organisations The first criteria are the price of the product and service. Pricing for the product and the service are done differently. The planning depends on the costs used in getting the service to the customer. Too high price or too low will hamper the growth of the business. Other criteria can also be based on cost and value. The cost of the product or service is the amount spent to produce that product or cost. The value is in the customer’s believed on the worth of the product or service to them (Grant, 2013). Chapter 13 1) Scope Of Conducting A Marketing Audit The marketing audit scope will include all functions across the business instructions and directions ensuring that they are correctly interpreted, development and modification of the requests and rules. On finance the audit will look at payment collection and settlement and on security cover monitoring. On market support the audit will focus on rules development, entry process and code development. The scope also touches on validation, settlement production and design authority that focus on compliance with the statutory rules and procedures (Grant, 2013). 2) Importance of control systems in measuring and delivering marketing performance Control systems are important in the market. These controls use the competition of price in output evaluation. Managers also determine their performance efficiency by using comparison of prices and profits as controls. Completion is another control that is used in the market to set product and service goods. Bureaucratic controls can also be used to influence the behaviour of market stakeholders. Bureaucratic controls include policies, rules, hierarchy of authority, reward system and written documentation. Bureaucratic controls are best used where the behaviour of market stakeholders can be regulated by the market or price mechanism. Control is used in the supervision and management of goods and services distribution by the government or relevant entity. Certain specified economic goals and political goals are achieved through market controls that include deliberate factor manipulation such as demand, supply, transportation and taxation (Grant, 2013). References Academy of Marketing, (2011). Academy of Marketing Conference 2011: Marketing fields forever. Journal of Marketing Management, 27, 13-14 Cross, J. S. (n.d.). Operations research in solving a marketing problem, Analytical Viewpoints in Marketing Management / [a Cura Di] Keith K. Cox Egan, J. (January 01, 2012). 45th academy of marketing conference, Marketing Review, 12, 3 Grant, R. M. (2013). Competitive strategy. London: Henry Stewart Talks Seidl, D. (2013). The role of meetings in strategizing. London: Henry Stewart Talks Keith, R. J. (n.d.). The marketing revolution, Analytical Viewpoints in Marketing Management / [a Cura Di] Keith K. Cox Meek, H., & Chartered Institute of Marketing. CIM. (2005), Managing marketing performance 2005-2006. Oxford: Elsevier Butterworth-Heinemann Žabkar, V., & Jančič, Z. (2007), Who's the boss in Slovenian marketing? Empirical evidences of the importance of marketing function. 1st International Scientific Marketing Theory Challenges in Transitional Societies Conference, Maribor, Slovenia, September 20th-21th, 2007, 175-183 Read More