SportUNE - Marketing - Case Study Example

Strategic Marketing Plan (Part II) College: Name: Students ID: Date: Course Name: Unit Code: Time: Instructor: Introduction Following the strategic marketing plan (part I), this paper outlines the strategic marketing plan (part II) for SportUNE. The plan helps to understand the process of formulating, implementing and measuring marketing strategies and enhance the understanding of the various strategies for new market entries, growth markets, mature and declining markets and for the new economy in sustaining competitive advantage over the product life cycle. Relevance of a Pioneer/Follower Strategy Pioneer or follower strategies are particularly important aspects to mull over when entering a new market. The newness of entering a market can be broadly classified to six categories as indicated in the diagram below; Newness to company High New product line New to the world product Revision or improvement To existing product Addition to the existing product line Cost reduction Repositioning Low Newness to market High It is always challenging to introduce a new product to the market. This would require SportUNE to spend heavily amid an uncertain environment and risk of failure. The marketing difficulty involves promoting the product and convincing target clients to adopt it. However, the challenges depend on the newness of product to company. This is where SportUNE would either choose to be a pioneer or a follower (Knuutila, 2003). Porter (1985) notes that pioneers see their advantage as being the first in the market. Pioneers can be respected and they create a name in the market that will spawn word-of-mouth effects. Just the once consumers use the pioneer’s product, they are likely to pay more for it than for additional new products. Moreover, the pioneer may well conquer the desired market spot. Pioneers are likely to incur less production costs than those for followers through the purported experience curve effect that boosts the pioneer’s cost benefit and profit prospects. Research has also shown that order of entry can considerably affect a firm’s feat in the marketplace; pioneers delight in durable competitive advantages over followers that decode into greater market share as well as profitability. Moreover, pioneering is a preferable strategy given the prevailing changing and competitive business environment. First entrants encounter less struggle among prospective customers, particularly those regarded as early adopters. This is because a pioneer has the capacity to ‘skim off’ initial adopters. Also, being a pioneer points to a high grade of consumer mindfulness that leads to product experimental, which, given positive usage or ingestion experience, results in constant repurchase conduct to curtail consumer superficial risk and information expenses. Upon establishing this pattern, consumers possibly will be unwilling to change brands upon late entry of the other brands. Porter (1980) lays emphasis on the barriers to entry that give pioneers integral benefits over probable entrants. Barriers to entry as well pull out the lead time stuck between an organisation’s head start and the rejoinder by followers. This lead-time empowers the pioneers to benefit in two ways. At first, at the time when there is no competition, pioneers enjoy monopolistic powers that they may well exercise to achieve greater profits than would be realised in a competitive market and may possibly as well expand the size of the overall market. Two, even after competitors come in, pioneers benefit from a reputable market place and learning curve economics which can sanction it to maintain a leading market share as well as higher margins. However, first movers by and large incur higher costs in view of the fact that product innovation is likely to be expensive than mere imitation. Pioneers are not the ultimate winners at all times nor is their status ever-lasting. A few instances such as the dotcom bubble burst did upset dotcom managers regularly stated to the adage ‘the first to market is the first to fail’ (Robinson & Min, 2002). Cases such as diet cola, EMI scanners, Bowmar calculators, and Xerox office computers prove that the follower advantage can arise from the case where the pioneers were not winners. Other cases such as IBM personal computers, Matsushita VHS VCR, and Sieko quartz watch indicate that followers were the winners. Followers take advantage of contracting suppliers as well as the workforce taught by pioneers. They benefit from infrastructure established by pioneers and the more and more government support attitude as a result of its familiarity of having dealt with pioneers. Also followers possibly will study the pioneers’ faults and rub in improved technology and procedures (Kabuth 2003). Additionally followers are able to firmly control their inventories, and apply strong downsizing measures through developing specialised inputs. Relevance of Growth-Market Strategies for Market Leaders and Share-Growth Strategies for Followers for SportUNE's Business Given the heightened competition in the international as well as the domestic markets, SportUNE has got to adopt strategies to grow not only its market but also its market share. The developed world markets, including Australia, are virtually saturated. Therefore, it is important for SportUNE to tactfully grow. To grow to be a market leader, SportUNE ought to plan carefully so as to become an organisation that outstrips its rivals. There are three key market leader strategies that can enable the realisation of this: (1) niche penetration, (2) mass-market penetration, and (3) skimming and withdrawal. For SportUNE to successfully adopt growth-market strategies as a market leader, the organisation must acknowledge that the involved market dynamics make it very much challenging to hold on to an early lead in comparative market share. The existing market share can only be maintained if the amount of sales grow constantly at the same rate as that in the overall market, this will enable SportUNE to stay equal in the entire market share. Market leader strategies help to kindle discerning demand amongst later adopters to guarantee that the organisation seizes a sizable share of the incessant growth in industry sales. The strategies also arouse crucial demand to facilitate a hurried overall growth in the market. Strategies such as mergers and acquisitions can enable SportUNE to increase in effective value since the value of the firm so formed by combining resources is greater than the sum of the independent values of the merged companies. Other benefits include operating economics, economies of scale, tax implications, and elimination of competition, improved financial planning, and stability, through diversification as well as backward forward integration. On the other hand, share-growth strategies seek to erect a small but money-spinning business within a specialised segment of the overall market previously ignored by pioneers. These strategies are aimed at dislodging the market leader or growing to become a commanding rival in the overall market. Share-growth strategies can enable SportUNE to attract potential customers who have not identified their brand loyalties and may have differing needs, tastes/preferences not offered by earlier entrants. This presents a gap in the market that can be easily attracted as opposed to converting customers in a matured market. The strategies can as well enable SportUNE to act aggressively to capture a larger share where competitors are not as much of aggressive. As a market grows, share gains are more valued due to the expected earnings growth from each share as the market spreads out. Possible Strategic Choices for SportUNE's Business Offerings for Maintaining Competitive Advantage in Shakeout, Mature and Declining Markets A shakeout is a period of transition in the market. It is characterised by excess capacity arising from expansion plans the overpass the demand in the market. Due to dwindling brand preference, product differentiation is hard to maintain. Competition is very much high as organisations fight to increase their market share as well as the sales volume. There is pressure on costs and profit margins are infolded, as a result, feebler firms end up dying away or get acquired. Distribution becomes a problem as supply chain members possibly will cut down the number of brands they transport amid declining sales. The main strategic traps leading to this situation include; failure to forestall changeover from growth to maturity, lack of a lucid competitive advantage, assuming that pioneering will cut off the firm from price or service wars, and favouring short-run profit instead of growing the market share. The probable strategies SportUNE can adopt in such an occasion are (1) sustaining competitive advantage, customer loyalty and satisfaction, and (2) creating flexible marketing plans to chase fresh prospects amid changing circumstances. In a mature industry, SportUNE could rely on various strategies to uphold the market share. If the organisation has a somewhat moneymaking share of one or more key divisions in the mature industry, the analyser and defender strategies could be the most-fitting. The analyser strategy is preferred in established industries that still face quite a few technological changes and may possibly have breaks for constant growth. The defender strategy would most appropriately be applied where elementary technology is not very much complicated or there is no expected dramatic change in technology in the short-term. The analyser as well as the defender strategies endeavour to sustain competitive advantage in reputable product markets. This is enabled mainly through product differentiation or through sustaining a low-cost position. Product differentiation is facilitated by means of superior quality or service. Product quality is enhanced by taking into consideration the dimensions of product quality that include: useful performance, durability, features, conformation to specifications, and dependability, serviceability, fitness and quality repute of the brand name. Dimensions of service quality are: reliability, receptiveness, empathy, and assurance. SportUNE can maintain a low-cost position through utilitarian products, novel product designs, economical raw materials, advanced production methods, cut-rate distribution, and overhead reductions. If the organisation intends to maintain its market share, the appropriate strategies to adopt are: Fortress defence through improving customer satisfaction and loyalty as well as supporting and simplifying repeat purchases, Adding flanker brands to frustrate hostile competitors, and Pursue niche strategy, especially if the competitor has a low share. Harrigan (1981) notes that firms operational in declining industries might carry on earning above average rates of return or even do better than firms operational in effervescent and growing segments in terms of financial performance apart from ‘divesting’ or ‘harvesting’. Organisations may well use various strategies to contest fruitfully given that there is no one strategy that at all times leads to success. He states that the success of an organisation is closely knit to its qualified competitive strong points plus the structure of the industry. Harrigan and Porter (1983) brought together four standard strategic options for declining industries: leadership, niche, harvest and quick divestment. Leadership strategy is where the organisation aims to realise above-average profits by growing into among the small number of companies left over in the industry. The exit of a lot of competitors leaves over the other organisations with more control over the decline process in addition to additional market power. Profitability may well be enhanced by increasing the prices. Moreover, the organisations left behind may well take on several strategic manoeuvres such as aggressive competitive pricing and marketing or cutting down the competitors' exit barriers in an effort to guarantee that other firms withdraw quickly from the industry. The niche strategy is grounded on discovering a favourable slice that will keep up demand or decline at a slower pace than the rest of the market. Preferably, the sector ought to be characterised by high returns. If the organisation’s strengths are in line with the requirements of the niche, it has to act proactively to achieve a robust spot in this fragment even as it divests other sections. The harvest strategy give emphasis to the generation of cash flow. By means of this strategy, SpotUNE is supposed to keep up facilities and restrain additional investments, reduce marketing and research and production be focussed on only the most cost-effective products. The long term aim is to exit in an orderly way. Finally, quick divestment is chosen at the time the top management accepts that the pre-eminent option is to exit the industry by now in the initial phases of decline. Harrigan and Porter (1993) also state that the sooner the organisation divests, the higher the prospects of finding purchasers for the assets, in view of the fact that the imminent glide in demand possibly will still be indeterminate. Despite the fact that it is chancy to divest early, for the reason that the prediction of decline may be attested to be inappropriate, it is similarly unsafe to wait for too long, since just the once the predictions have been established as accurate the buyers for assets will be in a solid bargaining spot (Harrigan & Porter, 1983.) Figure 1: Harrigan and Porter (1993) Generic Declining Industry Strategies Source: Harrigan and Porter (1993) Relevance of Various Strategies to Serve New Economy Markets in regards to SportUNE's Business New economy markets have majorly transformed the manner in which business is conducted, especially in the manner in which wealth is acquired as well as the creation of shareholder value. Information and communications technology has uncountable power in facilitating digital commerce that let organisations modernise their business processes, boost customer service and tender digital products as well as services. Therefore, SportUNE ought to visibly diagnose its e-commerce ingenuity as an essential chunk of its strategic objectives. The organisation must prudently assess the customer and competitor base, as an element of strategic thinking, to gain additional benefits. The strategies will enable the organisation to evaluate its industry forces and value-chain undertakings so as to find openings for IT innovation. An examination of the assets, resources, as well as staff competency and ascertain those appliances that put together a unique advantage over the competitors (Turban et al., 2000). Digital commerce has generated a fresh and open market that creates a space where buyers and sellers meet. The e-commerce strategies not only involve buying and selling goods and services, but also entail numerous processes within also across organisations. The strategies engage a wide array of undertakings up and down the value-added chain within as well as outside the organisation. There is wide acknowledgement that IT propelled commerce, for instance, electronic data interchange (EDI), shared corporate digital library, electronic messaging, among others may well augment organisational productivity and effectiveness (Turban et al., 2000). New economy market strategies improve productivity through generating internal efficiency and peripheral harmonisation by transforming intra- or inter-organisational integrative procedures. Effective profits of e-commerce strategies are manifest in the usage of the long-drawn-out information exchange system to generate organisational value. Owing to the addressability and receptiveness of e-commerce, SportUNE can boost its capacity to sense and counter market needs by collecting and circulating market information through the entire organisation. This information can be used to precisely evaluate or excite market demand and hunt for new markets. Making the correct choice would in turn strategically influence change in the connection between the organisation, its competitors and patrons. There are many more benefits of doing business online. The organisation can reach far-off markets in addition to accessing markets outside its present customer base. The internet offers a platform for all companies to have a somewhat equal playing field. Each one company is abridged to the shared size of the client’s browser window. Also, creating a new web presence possibly will not be cheap, but the cost of later upkeep is negligible. There are additional cost advantages for SportUNE in that it can keep updated information, post features, and basically keep up a site that is constantly up-to-date at a slight cost and time delay. Therefore, there is a combined greater manifestation in the current target market and acquisition a superior factor of the customer’s mind share. E-commerce strategies too stimulates rapport building with customers and partners. Information technology strategies have unmatched capacity to boost approachability as evidenced by companies such as Dell, and FedEx that nowadays permit partners as well as consumers to check different aspects of their dealings openly by logging onto their Web sites. The cost involved is low and with demand, provides an extra efficient way to react to consumer desires. Furthermore, introducing fresh services in ordinary markets is challenging and costly, but the internet makes available the route of introducing new services for clienteles, partners, and personnel at a marginal incremental cost. There is also a huge potential to heighten business-to-business exchanges (Turban et al., 2000). Appropriateness of Designing Organisational Structures and Marketing Plans for Implementation of Different Competitive Strategies for SportUNE's Business Implementation of strategy is simply putting the chosen strategy is into action. Strategy implementation takes in the systems design and management to reach the finest incorporation of people, structure, procedures and resources in realising organisational objectives. It therefore, affects the entire organisation from top to bottom, that is, it affects the corporate level, as well as all the functional and business divisions. Strategy changes more often than not call for the restructuring of the whole organisation. This is because the organisation’s structure principally decrees the establishment of objectives and policies. The structure also commands the allocation of resources. Therefore, SportUNE’s structure ought to be designed to expedite its strategic pursuit and so, follow strategy. With no strategy, SportUNE would find it hard to design an operational structure. There is no one ideal organisational design/structure for a particular strategy or type of organisation. What may be applicable for one organisation may not fit a similar organisation, even though prosperous organisation’s in a certain industry are likely to systematise themselves in an identical way. For instance, consumer good companies have a habit of emulating the divisional structure-by-product organisational arrangement. Small firms lean towards a functional structure whereas medium-sized firms are apt to a divisional structure. On the other hand, big organisations are likely to adopt a strategic business unit (SBU) structure or matrix structure. An organisation’s structure in the main grows to be more complex due to concatenation, or the amalgamation of some elementary strategies. SportUNE can face a number of external as well as internal forces, however, it is not necessary to change the structure in reaction to every single one of these forces, for the reason that this may well lead to confusion. On the other hand, a change in strategy possibly will render the current organisational structure ineffective. This is likely to be manifest by a lot of management levels, too many meetings attended by too many people, excessive responsiveness being directed to interdepartmental conflict resolution, a gigantic span of control, and a lot of unrealised objectives. Structural changes enable the implementation of strategies, but these changes in structure had better not be projected to ‘make a bad strategy good, to make bad managers good, or to make bad products sell’. Even though structure definitely influences strategy, workable strategies ought to be formulated given that a particular fresh strategy requiring considerable structural changes would not be attractive. This is the manner in which an organisation’s structure can profile the choice of strategies. However, it is very much important to establish the types of structural changes that are required to put new strategies into practise plus the manner in which these changes can best be realised. Market entry calls for good understanding of the business area plus the competitors, and the capacity to stand out from the rivalry. The market ideally presents a setting where the customer’s notion and knowledge regarding SportUNE’s products and services is impacted. Also, it is the place where the organisation can indicate that it is better than the competitors. All this information is usually captured in a market plan that is divided into different sections, with each section covering a specific aspect regarding the market that enable the organisation to implement its strategies (Robert, 2002). The first part presents the analysis of the market environment. This describes the current state of the organisation in terms of marketing, the target market(s), plus the marketing objectives and performance. Relevant external environmental forces such as political, economic, socio-cultural, technological, legal and ecological forces. The target market depicts the geographic, demographic, and psychographic attributes. The current target market needs are analysed along with the predictable variations in those needs, as well as how well the organisation’s contemporary products and services meet those needs. The marketing objectives are outlined alongside the performance measures along which appropriate corrective action is taken. The SWOT analysis analyses the organisation’s strengths (competitive advantages/core competencies) in meeting the customer needs. Weaknesses outline the organisation’s shortcomings in establishing or executing a marketing strategy. Opportunities indicate the favourable circumstances, which may produce rewards for the organisation. Threats are hindrances obstructing the realisation of the set objectives. Marketing strategies specify and describe the organisation’s target market(s) towards which marketing efforts will be aimed; it is future-looking. The organisation’s marketing mix section presents significant details as regards the 4p’s (product, price, place, and promotion). There is also the organisation’s arrangement through which marketing strategies will be implemented. The decision making authority is also indicated based on the organisation’s structure. Finally, under valuation and control, measurement and evaluation of results of the marketing plan is indicated. Actions to be taken to condense the differences stuck between the intended and the actual performance are too indicated (Rhee & Mehra, 2006). Role of Marketing Metrics and Marketing Audit in Relevance to SportUNE's Business and its Offerings Marketing is important for the survival of SportUNE. Even though marketing can at times inflict high cost on the organisation, it establishes a major role to the long term success of the business. It has been stated through theory and practise that the capacity to measure marketing performance considerably influences firm performance besides the marketing standing in the firm. There are no clear marketing metrics that have been developed so far. However, Kotler (2007) notes that marketing effectiveness and marketing audit are two well-known marketing metrics used to monitor marketing controlling variables. Marketing effectiveness can be difficult, however, the realisation of noble results may well be because a division is in the right place at the right time and not necessarily due to effective management. Marketing effectiveness’s role is to enhance marketing expenditure for the short-term in addition to the long term so as to support, together with, brand strategy by constructing a market model by means of effective and unbiased marketing metrics as well as analytics (Ambler & Roberts, 2008). This requires managers to have adequate statistics in order to plan and effectively allocate resources to erratic markets, products and regions. It depends upon the proficiency of managers to convey cost-effective strategies from their thinking, organisation and informational assets. Marketing audit conducted across SportUNE is a basis to review the organisation’s marketing setting, antagonism, purposes, strategies, administration, structures, processes as well as practices in all areas of the marketing mix, together with product, pricing, supply-chain, customer service, communication, besides research strategy. This provides a basis for the organisation to develop and improve its general marketing effectiveness. Marketing audit involves a complete inspection of the organisation’s or business unit’s marketing arrangement, tactics, strategies, aims, and actions conducted so as to identify existing and prospective complications and openings and endorsing an action plan to pin down more operational uses for the marketing means and expand the organisation’s marketing performance (Davis, 2007). Complete marketing audit also provides a centre for raising wide-ranging plans of action to develop SportUNE’s general marketing effectiveness. There are three key benefits SportUNE may realise. One, the top management gains a liberated and impartial understanding of the organisation’s marketing performance. Two, the marketing assessment of the organisation possibly will result in a whole reconsideration of the organisation’s course, not a mere adjustment of existing marketing efforts. Lastly, marketing audit will enable the management to fix precedence for the marketing agendas (David, 2007). Auditors may well aid the management to concentrate on key modifications, even as they keep away from political brawls that obstruct change. Marketing audit and effectiveness are also important in control. In management, control entails the process by which managers make sure that resources are used in an effective and efficient manner in the achievement of the organisational objectives. Control can be directed marketing courses plus other projects instigated by planning process. Statistical measures along with assessments bred by the control process also act as inputs to the planning process (Ambler et al., 2004). References Ambler, T., and Roberts, J.H. (2008). “Assessing marking performance: don’t settle for a silver metric” Journal of Marketing Management, 24(7): 733-750. Ambler, T, Kokkinaki, F., and Puntoni, S. (2004). “Assessing Marketing Performance: Reasons for Metrics Selection” London Business School, London NW1 4SA, David, F, (2007). Strategic Management: Cases and Concepts, Pearson Education, New Jersey Davis, J. (2007). Measuring marketing: 103 Key Metrics Every Marketer Needs. John Wiley and Sons (Asia) Pte Ltd. Harrigan, K.R.(1981). “Barriers to Entry and Competitive Strategies,” Strategic Management Journal, 2(4), 395-412. Harris, L. C. and Ogbonna, E., (2006). Initiating Strategic Planning, Journal of Business Research, 56: 100-121. Kabuth, O., (2003). “Pioneering Versus Following in Emerging Markets: The Case of the Automotive Industry in China and Brazil,” Doctoral Dissertation, University of St. Gallen, Switzerland. Kotler, P. (2007). Modern marketing. GRADA publishing. Knuutila, E., (2003). “First Mover Advantage,” Seminar Series, Institute of Strategy and International Business, Department of Industrial Engineering and Management, Helsinki University of Technology. Porter, M. J. (1980). Competitive Strategy, New York: The Free Press. Porter, M. J. (1985) “Competitive Advantage: Creating and Sustaining Superior Performance.” The Free Press. New York. Rhee, M. and Mehra, S., (2006). Aligning Operation, Marketing and Competitive Strategies to Enhance Performance, International Journal of Management Science, 34. Robert, B., (2002). Strategy is Destiny: How Strategy Making Shapes a Company’s Future, Free Press. Turban, E et. al., (2000). “Electronic Commerce: A Managerial Perspective,” Prentice Hall, Upper Saddle River, NJ. Read More