Marks Company: Strategic Marketing Plan - Case Study Example

STATEGIC MARKETING PLAN Executive Summary Strategic marketing plan is a tool that every business or sales manager needs to effectively achieve the objectives of the company. This report explores the subject of Strategic marketing relative to international marketing as it regards the development strategies of Marks Company. This is a company that deals in the production and supply of clothing and domestic home products. Development herein refers to the company’s intentions of introducing its products into countries it is yet to establish itself. This report purposes to provide a hands-on experience in formulating, implementing and measuring marketing strategies for Marks Company. Additionally, this marketing plan focuses on enhancing in-depth understanding of the various Marks Company 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. 1.0 Introduction 3 1.1 Product Analysis 3 2.0 Product life cycle 4 3.0 New Markets entry 7 4.0 Pioneering Strategy 7 4.1 Niche Penetration 8 4.2 Skimming and early withdrawal 8 5.0 Growth Strategies 8 6.0 Marketing Strategies 9 6.1 Shakeout 9 6.2 Mature Stage 10 6.3 Declining stage 10 7.0 New economy markets 11 8.0 Organizational structures 12 9.0 Marketing Plan 14 9.1 Current Situation and trend 14 9.2 SWOT analysis 14 9.2.1 Strengths 15 9.2.2 Weakness 15 9.2.3 Opportunity 15 9.2.4 Threats 15 9.3 Cost benefit Analysis 16 10.0 Marketing metrics 16 11.0 Marketing Audits 18 11.1 Market environmental audit 19 11.1.1 Competition 19 11.1. 2 Power of the supplier 20 11.2 Market function Audit 20 1.0 Introduction 1.1 Product Analysis Marks Company operates in the production and supply of clothing and home products. The company currently leads in the provision of women-wear and lingerie in the United Kingdom with continuous growth geared towards menswear, kids wear and more. With increased popularity with urban wear, the company aims at introducing clothing that familiarized with hip hop artists. There has been increased growth and development in urban wear which is associated by celebrity and whose target population is the youth between the ages of 18 to 40 years (Chae, 2012). The company offers a variety of clothing for different age groups and is tremendously comfortable to wear. Marks clothes differentiate from its competitors due to the fact that they are made of long lasting apparels have lovely prints and designs and are comfortable to wear. The company puts most of emphasis on product quality and respect for customer by implementing stock sizing systems and giving fair value for the prices. The Marks Company has the broader goal of internationally commercializing is products to reach more people and widen its customer base. 2.0 Product life cycle Marks Company realizes the importance of a product life cycle in strategic marketing as this assists the company to look into the future. The company product life cycle is defined by five major stages namely; introduction, growth, shakes out or competitive turbulence, mature and decline. The graph below gives a pictorial view of the PLC stages; The company has no set time period for the product life cycle and it has different length variation for each stage. Introduction stage is critical stage of Marks Company product life cycle. Here, the company is involved in creating an initial promotion for its products. Normally, the company is involved in creating a public awareness to educate people about their products. According to Chae (2012), due to increased competition in the clothing industry, the company adopts the skimming strategy in its introductory stage. Here, the company sets prices of its products at a lower price at the beginning and gradually increases with time. Additionally, this strategy assists making their urban clothing known. The growth stage is the second stage after successfully undergone the introductory stage. Here, the company product start is growth and much promotion is focused on advertising. The company enhances their competitive edge through creation of a brand image. The company at this stage defines its strategic market objective as to increase growth through increased sales thus increasing its competitive position (Chae, 2012). During this stage, Marks Company focuses on gaining the clothing industry market share as well as brand preference. At Marks maturity stage, brand awareness is so strong in that the sale of the clothing continues to grow but a more declining rate compared to the past two stages. At this stage, there are numerous competitors with the same products and thus the company defends its market share through extending its product life cycle as opposed to making profits. Here, the company is involved in encouraging its retailers in their shops to give more shelf space to the product compared to that of its competitors. Additionally, the company modifies its clothing so as to compete in this industry while at the same time differentiates its products from competitors. The decline is normally defined by decline in sales, unfavorable economic condition and changes in clothing trends globally. At this particular stage the sales of clothing products decline due to the saturated market. To survive in this decline stage, Marks Company harvest their products through reducing marketing cost as well as continue offering their products to loyal clients. Additionally, at this stage the company marketing mix decisions largely depends on their sales strategy. 3.0 New Markets entry Marks Company understands that expanding in new markets is an effective way for them to grow their business. Clearly, expanding to new markets has been a very effective way to leverage Marks Company clothing for growth. The company highly invests in various appropriate levels of resources in market selection, analysis and entry method so as to create a foundation for the company success. Before engaging in new market entry, Marks marketing team performs a market analysis. This is important in ensuring the team is able to develop an in depth understanding of competitors, market growth rates, potential barriers to entry and forecasted demand (Kotler et al., 2008). 4.0 Pioneering Strategy Marks Company understands the importance of adopting a pioneering strategy especially in the urban clothing product that is not exploited. Pioneering strategy are perceived to be potential sources of competitive advantage due to the fact that the company is in a position to make first choice of market position and segments (Kotler et al., 2008). With Marks company introduction of urban clothing, according to Kotler et al., (2008), this strategy gives the firm a better chance for long term success in profitability and market share. Here, the company creates sufficient resources, size as well as competences so as to take advantage of its pioneering position. Being pioneers of the urban clothing, Marks Company enhances their competitive advantage by way of being first in this product line. 4.1 Niche Penetration In its urban clothing product line, Marks Company adopts the creation of a niche penetration. Here, the company is in a position to gain the biggest market share thus avoiding direct confrontation from its bigger competitors. Additionally, instead of pursuing the objective of sustaining and capturing the leading market share, Marks Company shifts their efforts on a well structured and defined single market segment. The main advantage for the company to adopt a single market segment is to gain much impact from the market limited resources. 4.2 Skimming and early withdrawal In addition to niche penetration, Marks Company has adopted skimming and early withdrawal pioneering strategy for its urban clothing product line. Here, the company is involved in setting high prices while at the same time engaged in limited advertising to maximize on per unit profits. This assists the company to recover the product development cost for the urban clothing quickly. Additionally, in it’s skimming an early withdrawal, the company work in developing its technology to meet today technological advancement. 5.0 Growth Strategies In today competitive business environments, it is important for businesses need to understand opportunities in the growth market for their existing and new products (Walker, 2011). Clearly, understanding assists Marks Company in gaining market share easier. One of the main growth strategies that Marks Company intends to employ by being a share leader in the urban clothing product line is market expansion strategy. Here, the company intends to increase its ability to tract new customer for its new product line. Here, the company ensures that the market expansion strategy significantly improves its ability to retain its current clothing customers as key market fragments. According to Walker, another advantage of this growth strategy is the fact that both potential and current competitors have limited competences and resources and thus giving Marks Company higher growth ability. In addition to market expansion strategy, Marks intend to also adopt contraction or strategic withdrawal growth strategies. Here, the company uses the contraction strategy to increase its ability to attract new customer for its urban clothing product line. Additionally, the company is involved in understanding the different selected high growth segments by way of withdrawing from slow growing segments so as to effectively conserve resources. The strategy also allows both potential and current competitors with higher resources and competencies to present a strong challenge for Marks Company so as it can improve on their new products offerings. 6.0 Marketing Strategies Each of the product life cycle stages is normally couples marketing strategies. 6.1 Shakeout Shakeout stage can be regarded as the transition from the market growth to the product life cycle maturity stage. The shakeout stage initialize when the urban clothing market is still growing. Changes such as increased competition, growing pressure on profits and costs weaken the ability of the firm marketing strategy. 6.2 Mature Stage During this stage, it is necessary for Marks Company to adopt various marketing strategies ahead of its competitors. Firstly, the company plans to focus on increasing market penetration (Walker et al., 2011). Increased penetration should be coupled by enhancing the product value, benefits and features so as to stimulate the urban clothing product line primary demand. This strategy also assists the company in increasing the proportion of their product users through converting its non users to more major market segments. The other strategy is the extended use in the company marketing. Here, the extended use assist the company in increasing the amount of the urban clothing products used by an average consumer through developing new designs and fashions of the named product line. The strategy calls for enhanced marketing competencies as well as resources so as to ensure there is development and promotion of the new fashions and designed (Walker et al., 2011). 6.3 Declining stage There are various factors that affect the attractiveness of declining market environments and thus the need for adaptation of various marketing strategies. These factors are conditions of demand such as price stability, speed of decline, exits barriers that are defined by single product competitors, excess capacity and reinvestment requirements finally, rivalry determinants is another factor affecting the decline stage which is defined by diseconomies, customer industries and customer switching costs (Kauffman et al., 2012). The strategy adopted in the decline stage is the niche and harvesting strategies. In the harvesting strategy, the company is involved in maximizing its short term cash flow through maintaining expenses during this stage. Here, Marks Company engages in leading its share position and thus maintaining its loyal customers. Niche strategy is another marketing strategy that is important for Marks Company. Here, the company main focus is to strengthen its position in more substantial segments. The company is involved in developing a more competitive advantage in its single segments through effective usage of its resources (Walker, 2011). 7.0 New economy markets With increased technological advancement, it is very essential for business to adopt new technology so as to penetrate into new economy markets. New economy today can be equalized to a more digital economy that calls for new businesses and marketing practices. New technology across the globe has seen plentiful availability of information, exchange of information and greater and diverse goods and services. There are various opportunities provided by new economies technologies to marketers thus facilitating increased sales. There are various strategies that need to be employed so as to facilitate new economies (Welsh, 2005). Firstly, it is necessary for any company to shift from organizing by product units to organizing through the use of customer segments (Shahin et al., 2004). Customer satisfaction plays a key role and therefore marketers need to shift their focus on profitable transactions to greatly focusing on consumer lifetime value. Additionally, customer satisfaction entails building through performance which is considered as in depth customer satisfaction measurement (Walker, 2011). 8.0 Organizational structures Marks Company realizes the importance of developing an organizational structure in a manner that maximizes profitability and efficiency. The company has put their organizational structure that its employees understand it. Organizational structure need to design in a manner that that best serves the company needs so as to increase business success (Lafley, 2009). Marks Company is involved in making changes in its organizational structure so as to fit their needs so as to address the new direction it plans to take in this case marketing the urban clothing. Clearly, organization requires developing organizational structure that can easily be understood by all company staff. According to Lafley, (2009), successful implementation of any company strategy is governed by the designed organizational structure. Marks Company organizational structure aims at suiting its market, technical as well as competitive environment. The company ensures that the organizational structure adopts different mechanisms for resolving conflicts as well as coordinating functional departments. For Marks Company, their organizational structures are largely directed to operating efficiently which is critical towards successful business operation. From above organizational chart, there are various departments which the fashion coordinator works. The coordinator works in an advisory capacity and he reports directly to promotion and merchandising director and the human resource specialists who work under the CEO. It is evidence that the above organizational structure largely allows a certain degree of specialization within the organization while at the same time guaranteeing coordinated store efforts (Lafley, 2009). 9.0 Marketing Plan 9.1 Current Situation and trend With today globalised world, there are various economic forces that affect the clothing industry. Evidently, consumer confidence play an important role as people do not shop unless they are feeling good. Economic slowdown affected the sales of clothing thus decreasing their sales significantly. Generally, the clothing industry is positive due to the new fashion with key focus on urban clothing. Interest in the clothing industry remains high even with a number of discouraging factors (Porter, 2008). With increased globalization, more customers especially the teens are buying urban clothing. By the year 2015, the teen population is expected to significantly increase which is a plus for the Marks Company. Increased competition has forced retailers to come up with new strategies which include restructuring their company merchandise mix. 9.2 SWOT analysis For Marks Company, A SWOT analysis assesses the company strengths, weaknesses, opportunities and threats. Strengths and weaknesses emerge from internal issues whereas opportunities and threats emerge from external issues. SWOT analysis assist the company in accomplishing its objectives and what are the barriers need to be minimized to achieved the desired results. 9.2.1 Strengths Organizational strengths are its capabilities and resources which can be used for developing a more competitive advantage. These strengths; Reputed global customer base High compliance with international and national laws High skilled labor as well as trainable workforce Quality manufacturer for clothing especially for mass market Well developed resource base 9.2.2 Weakness A costly labour source High cost of inputs thus increased interests cost affecting cost competitiveness in the clothing industry Inadequate information on the upcoming fashion trends thus requiring the company to remain dependent on middlemen 9.2.3 Opportunity Customers are becoming increasingly aware on the different global fashion trends and it is evident that fashion ranges are currently limited. There is still a gap in the urban clothing market. Urban clothing brands values can heavily be promoted by the retailers to add value to the different products they are selling 9.2.4 Threats Urban clothing trend may not be significantly important in the future. Companies that have invested in urban clothing supply chain may lose out financially. Customers are largely influenced by trends and therefore expect new product in the stores. 9.3 Cost benefit Analysis Company requires a more systematic for comparing both benefits and cost of the marketing strategies taken. Cost benefit analysis assist organization to understand whether the decision was sound and whether the benefits outweigh the cost. Benefit Proposed Cost Return on investment Financial analysis of the company cash flows so as to show net gain Improved performance such as better customer survive, lowering operating costs and high speed Expected productivity gain Lower reject rates Reduced energy consumption Better customer service Enhanced customer surveys that demonstrate quality and service improvement 10.0 Marketing metrics Marks Company highly recognizes the need for marketing metrics not forgetting the potential benefit they provide. The company marketing department has a responsibility to effectively account for investments in both sales and marketing strategies. Clearly, marketing requires marketing metrics so as to demonstrate its performance as well as take a more responsible role in profitable growth and managing profits (Chae, 2012). In Marks Company marketing metrics widely measures performance. The diagram below defines the marketing metrics track, marketing performance and profits for Marks Company. There are five steps involved in measuring performance for different processes within organizations. These steps are; setting performance standards, specifying feed backs, obtaining data, evaluating and taking corrective measures (Shahin et al., 2004). Marks Company has well designed monitoring system that supports the company marketing metrics. Based on the sales volume the following are elements to track; Category Element to track Metrics Revenues What are the company sales in relation to content marketing Has the organization marketing improved the conversation rate? Have the undertaken content marketing reduced returns? Total units, sales and average order size Conversion rate Number of return Expenses What are the company content creation costs? Has the company content marketing reduced search marketing costs or improved results? Total costs including breakout external versus internal costs Search marketing costs 11.0 Marketing Audits Marketing audit can be defined as a systematic, impartial and critical appraisal and review of the company marketing operation. The diagram below gives a pictorial definition of marketing audit; Marks Company defines its marketing audit as an analysis, review, and examination of its marketing activities. Here, the company evaluates the marketing environment and strategy. After conducting a review on the named areas, the company identifies weakness and problems encountered during the organization marketing activities. Additionally, the company marketing audit assists the company in examining how its marketing department functions. Further, the company is able to compare its designed marketing plan with its actual marketing performance. Shahin et al., (2004) further asserts that marketing audit assists the company in adapting marketing strategies with today changing marketing environments. 11.1 Market environmental audit Marks market environmental audit will analyses the marketing competitors and suppliers. The urban clothing product line marketing strategies will be successful if competitors and suppliers are well monitored and evaluated so as to meet customer satisfaction. 11.1.1 Competition The manner in which Marks will avail their services and products will depend on the strategic plans put in place and will also determine their competitive advantage. Competition in the clothing and textile industry remains vigorous and stiff because of the diversity and the fast pace at which fashion trends change. Porter (2008) asserts that a competitive advantage must form part of the strategic plan since it puts one firm over the others. Competition in this industry ensures that only quality and customer-desired products are availed in the market. 11.1. 2 Power of the supplier The bargaining power of the Marks Company as the supplier is their ability to convince the customers in targeted markets to choose cloth and home products from Marks over others. This may be considered as a result of quality service that is driven by how competitive a market is (Porter, 2008). This relates to how the products from Marks company ogre with the cultural and social beliefs. The company is supposed to win the preference of the customers. It is supposed to enhance cooperation with the public. Relationship between the company and the customers is essential for the company to understand the needs of the customers, their preferences and responses. 11.2 Market function Audit Marks marketing function audit is a compete study of their marketing activities in relation to promotion, price, product and pale of distribution. Marks are known for its cheap prices and quality products. The company designs are fashionable and trendy. The urban clothing product line includes cloth ware and other fashion accessories. The company provides trendy fashion at low prices since it does not involve any middle man. The company is involved in buying their fabrics direct from the suppliers. The company aims at stationing its stores in places that are highly profitable so as to achieve most company benefits. Marks promotional strategies entail both traditional and modern methods and thus reaching more segments. With increased social networking, the company uses Facebook and Twitter in reaching out to its customers. The use of social media provides a large impact on the company sale as well as brand image. References Chae, R. (2012). Introduction to Korean Society and Culture. South Korea: Dankook University. Kauffmann, L., & Roesch, J. F. (2012). Constraints to Building and Deploying Marketing Capabilities by Emerging Market Firms in Advanced Markets. Journal of International Marketing, 20(4). Kotler, P., Armstrong, G., Wong, V., & John, S. (2008). Principles of marketing. Harlow, United Kingdom: Prentice Hall. Lafley, A. (2009). What only the CEO can do. Harvard Business Review, 3(5), p.67-89 Porter, M. (2008). The Five Competitive Forces that Shape Strategy. Harvard Business Review, 86(1). Shahin, A., & Mahbod, M. A. (2004). Prioritization of key performance indicators: An integration of analytical hierarchy process and goal setting. International Journal of Productivity and Performance Management, 56(3). Walker, O.C., Gountas, J.I., Mavondo.F.T., & Mullins. J. W., (2011). Marketing strategy: A decision-focused approach. (2nd ed.). North Ryde: McGraw-Hill. Welsh, R. A. (2005). How Cultural Differences Affect Your Global Marketing Message. Retrieve from http://www.rawpowerwriting.com/article.asp?id=9 Read More