Strategic Marketing of The Tree Plantation Company - Case Study Example

Table of Contents 1.0Executive summary 3 The Tree Plantation Company provides wood products for the international and regional market. The plantation industry is one of the fastest growing industries in the globe. This is because of the high revenue the industry provides to the economic development. The Tree Plantation Company thus, maximizes its advantage in the market by implementing a number of marketing strategies. This company seeks to become a global sole provider of timber and wood products. Because of the inadequate exploitation of this market, the Tree Plantation Company stands a major opportunity in dominating the industry. To achieve this, the company will have to invest in various market strategies. On the financial standing, the company has seemingly made massive profits over the years with a profit margin of approximately $200,500 on sales in the previous year. The table below provides a summary of the company’s performance over the preceding years. 3 1.01 Introduction 4 2.0 How to Change the Marketing mix in order to Succeed 5 3.0 Strategies suitable for the Changing Environment 7 4.0 Ways of Strengthening the Competitive Position of the Company 10 5.0 Ways to Satisfy Customers and achieve Performance Targets 11 6.0 Segmentation, Targeting and Positioning (STP) strategies of the company 12 7.0 Decision-making in a Complex Situation 13 8.0 Conclusion 14 Reference List 15 1.0 Executive summary The Tree Plantation Company provides wood products for the international and regional market. The plantation industry is one of the fastest growing industries in the globe. This is because of the high revenue the industry provides to the economic development. The Tree Plantation Company thus, maximizes its advantage in the market by implementing a number of marketing strategies. This company seeks to become a global sole provider of timber and wood products. Because of the inadequate exploitation of this market, the Tree Plantation Company stands a major opportunity in dominating the industry. To achieve this, the company will have to invest in various market strategies. On the financial standing, the company has seemingly made massive profits over the years with a profit margin of approximately $200,500 on sales in the previous year. The table below provides a summary of the company’s performance over the preceding years. Table 1 the Tree Plantation Company Performance over Past Five Years Year 1 2 3 4 Last Year Sales $183,700 $422,510 $669,670 $1,023,710 $1,421,170 Gross Profit $62,625 $167 $100,701 $133,602 $201,916 1.01 Introduction A plantation is a large artificial enterprise in which crops are grown for sale. In most cases, these crops are sold in other markets and are not often utilized for the local market consumption. Some crops grown in plantations include trees, coffee, tobacco, and sugarcane among others. A common characteristic of the plantation industry is the aspect of monoculture. This is where one specific crop is planted in an extensive plot of land without the inclusion of the natural plants. This industry appears to be taking a major benefit of the economies of scale because of its massive land usage. However, following the 2008 international financial crisis, a number of plantation industries have been reported to have suffered major lose in their production. Whereas some of the industries appear to have improved from these loses, some are still struggling to regain their original standing in the market. The Indonesian rubber and palm oil industries are good examples of some of the industries that recuperated from the global crisis. This is because of the increase in demand for the products and the considerable fall in prices (Kuswantoro 2010, par. 1). The focus here is majorly on the marketing strategies that can be implemented in the plantation industry. This is to enable the market succeed as well as to strengthen its competitive position in the market. Marketing strategy enables a company to focus its resources on the available opportunities, which in turn enable it to increase its sales and improve its competitive benefit. Marketing strategy seemingly incorporates the short and long-term actions in marketing. Most marketing strategies are developed from analysis and evaluations, which mainly focus on the present state of the company. In this, a thorough scrutiny is made and strategies formulated to help the company in achieving its goals. In this context, it is important to first focus on the current situation of the plantation industry. Seeing that the global financial issues affected a number of organizations, most of the organizations in the plantation industry have been trying to recover from this situation. Various studies reveal that marketing strategy is a fundamental foundation of marketing policies, which enable an organization to obtain its intent. A common aspect of the marketing strategy is noted in its formulation where it is often designed in a premeditated way. In most cases, these plans are developed to incorporate actions that can be implemented by the organization within a stipulated period. It is thus vital to ensure that the marketing strategy is dynamic and interactive. This is because of the drastic changes in the market. A cautious analysis of the internal and environments of the organization is important. In the internal analysis, factors like the market mix, performance, and strategic limitations are often considered. Externally, focus is mainly on the consumers, competition, and the market technological evolution. Marketing strategies help organizations to distinguish business opportunities, develop new goals, and verify the most advantageous market mix (Sasmita & Suki 2011, p. 5). 2.0 How to Change the Marketing mix in order to Succeed The market mix has always been noted to determine the extent of the marketing actions. The market mix tends to affect all the variables of a company in that, all the aspects of the market mix if not properly managed can affect the overall strategies in an adverse way. This market mix seemingly comprises of the product, location, price, advertising, consumers, and the services of the organization. For an organization to change its existing situation, it is vital to consider these aspects of the market mix. In the plantation industry, these factors can largely change the industry’s market stand (Sasmita & Suki 2011, p. 6). By addressing these factors individually, I will seek to identify the most appropriate ways of ensuring a successful progress in the market through the change of each market mix. Product denotes the outcome of the company’s activities. This can be viewed as the equipment mechanisms employed to meet the wish of the consumers. In this context, the product mix relates to the various products offered by the plantation industries, such as rubber, timber, and sugar among others. These products are mostly the major determining factors of the organization’s market extent. The product mix seemingly determines the girth, which connotes the scope of the product line accessible to the organization, the length which refers to the number of units in the company’s product mix, the strength which refers to the variation provided for each product, and consistency of any company which seemingly refers to the scope of relationship between different products of the company. Changing the product eventually has an effect on the success of the company in the respective market. In the Plantation industry, changing the product incorporates widening the market extent of the company. This can be achieved through the study and analysis of the market. Assessing the market demand for the product is vital in enabling a company to meet the needs of the consumer. Seeing that the company is both regional and international, changing the product by extending the market niche is important in ensuring the success of the company (Sasmita & Suki 2011, p. 6). Location is the place for conducting the business. This is commonly considered a focal point for the production of goods or services of the company. It is where all the business activities are conducted. For instance, book keeping, management and processing of the products. In this context, for the company to succeed, it is important to select a focal point from which to conduct the business. Seeing that the company is regional and international having an accessible location is paramount. This is because the location of the business determines the level of accessibility of the company products by the consumers. It also helps in balancing the costs to be incurred by the company when delivering its products to the consumers. In selecting an appropriate location, it is important to consider the transportation needs of the consumers as well as that of the company. Most plantation companies tend to offer delivery services to their regional clients, having an easily accessible location goes a long way in ensuring that the company does not incur extra costs in the event of conducting its operations. For instance, by ensuring that all the production units are close together will help the company in saving many finances as well as make the work easier for the employees (Sasmita & Suki 2011, p. 6). Price is a vital component in any business transaction. The factor provides income and generates profits for the company. The pricing of the products tends to affect its quality generation. In the market mix, prices are often required to be flexible. This is because of the drastic changes that occur in the market following the effects of environmental factors. For instance, during the global financial crisis, major plantation industries were forced to regulate their product pricings to enable them keep up with the market conditions. A good example is the Indonesian palm oil and rubber industries. In determining the price of products, a number of factors have been noted to come to play. For instance, the target market, demand for the product, cost of production as well as the competition. Before making any major changes in the prices, it is important to analyze the market (Sasmita & Suki 2011, p. 6). Advertising is a promotional activity often used to provide a communication link between the company and the target market. Advertising affects the way the target market reacts to the company’s product. It is vital to ensure the personnel involved with the advertising of the company product are effective and efficient. This is because, advertising has been considered a major relationship builder between the company and its consumers. Having good relations with consumer usually goes a long way in ensuring the success of the company in the market. It is often important to promote the products of the company. This is because; advertising helps to create awareness to the target market of the company’s products. It also helps to strengthen the company’s relationship with the consumers (Sasmita & Suki 2011, p. 6). 3.0 Strategies suitable for the Changing Environment Different businesses implement different market strategies depending on their business situation. According to Nash (2000), there are five essential components of strategic planning. These components seemingly determine the fundamental strategy that can be implemented to help a company succeed in its changing environment. First is the aspect of the product. Edward acknowledges the importance of designing products that can meet the marketing opportunity. That is, developing a product that can be marketed to the consumers and be able to meet their financial standings (Nash 2011, p. 21). In achieving this, the need for advertising comes to play. Consumers need to be aware of the new developed products in the market. Advertising helps in promoting these products; it mostly involves the reintroduction of products to the consumers. In advertising, consumers can identify the products they can afford as well as they can obtain additional information on the product. In relation to this, it is important to enhance the product for the consumers to be attracted to it. As seen in changing the market mix above, it is vital to design ones products to offer attractive benefits to the customers. By having the company provide discounts in the delivery services, customers are likely to keep coming back to the company for more products. Offer strategy is usually considered one of the effortlessly revised especially when the company is looking to achieve fast results. This strategy is mostly price based. A slight change in the pricing of the product by a company can have extensive effects on the company’s sales. For instance, by indicating a slight reduction in prices, a company stands the opportunity of attracting more customers to its products; the vice versa is true for a price increment. It is also vital to consider the way in which the price ranges are communicated. As established before, communication is a vital aspect in any marketing strategy. This is because of the effects it has not only on the sale of the company products but also on the company’s relationship with the consumer. Developing a strategic means of communication like issuing a brochure or newsletter that indicates price changes, a company is able to affect its environment and business growth. Most consumers get attracted to slight indications of a fall in prices, this is because of the advantage they derive from such measure by the company. For example, if the company offers a discount delivery fee set at $36,000 for a huge order of product units, this can be communicated in a number of ways to attract the consumer. For instance, offering half prices to consumers who place more than one order, consequently, the company can implement a discount in pricing for consumers who purchase products that exceed a certain set target price. It is however, important to consider the elasticity of the prices one sets for the products. This is because; different consumers have different income levels despite their need for the same product. It is thus vital to establish a flexible price range that will enable the company to maintain its market despite the changes in the market environment (Nash 2011, p. 25). Media strategy is another form of strategy that can be adapted by the company to ensure its survival in the changing environment. Generally, this strategy seeks to create awareness in the market about the products of the company. Selecting the most appropriate and effective mode of doing this is thus important. Most companies have been noted to rely on the market for this. Before setting up a media strategy, it is paramount to identify the target market and segment. Therefore, it is easy to select the most appropriate mode of communicating these products to the customer. For instance, in reaching an international market, the company can implement the use of the internet to market its products. For the regional market, media like publications, radio, and even brochures can be used (Nash 2011, p. 31). Market dominance is another commonly used marketing strategy. This strategy plainly refers to the control a business has on the market. In general, the market dominance strategy involves the use of the internet to market products. A number of steps have been identified in the implementation of this strategy. This includes sending of notifications to customers informing them of new developments in the company. In this strategy, it is important to keep the customers informed of the changes and developments taking place within the company. This helps in ensuring they are sentient of the progress being made by the company. Another step in ensuring domination of the market is to link the company with other websites. When operating on an international level, it is vital to link the company with other related sites that will ensure that the consumers get access to the company information and products. The market dominance strategy seemingly advocates for the taking control of the market to ensure an effective monitoring of the company’s sales and progress. By ensuring the company is connected to other sites, the company expands its market extent and is thus able to manage the changing market environment (Anonymous 2012, par. 1). Michael Porter seemingly developed Porter generic strategies. These strategies majorly focus on the scope and strength of the strategy. The scope has been noted to refer to the demand aspect whereas the strength of the strategy focuses on the supply aspect of the market. The Porter generic strategies mainly consist of three different dimensions; the intensity of differentiation, relative cost of the product and the extent of the target market. In this context, this strategy is applicable in the sense that, it helps the company to focus more on the market. This is by evaluating the demand and supply aspects of the market. By having a clear understanding and analysis of the different levels of demand and supply, the company is able to manage its production and ensure that it stays in line with the market variations. It is important for any company to balance the market demands and supply. This is so because, it helps the company to control its level of production and prevent the inappropriate use of resources. When the market demand for the product is high, the company can design its productions to meet the needs of the consumers, and vice versa. There are numerous cases where the supply is high contrary to the demand for the product. By implementing these generic strategies, the company will be able to predict the market behaviour and thus, counteract these situations in an effective way. Cost leadership strategy, this strategy incorporates the need to have attractive prices that are consumer sensitive. Subsequent to identifying the target market and segment, it is important to follow this by establishing a price sensitive market for the consumers. To achieve this, the company needs to be able to achieve a high asset turnover. In essence, this involves an increase in production. Taking into consideration the company’s investment in the plantation industry, to achieve this turnover can be uncomplicated, considering the advantage the company has over the economies of scale. This is because; the company already produces its products on a high scale. This provides the company with the ability to maintain a market share, which acts as a barrier for other competitors looking to invest in the same business. The cost leadership strategy can also be achieved through the company acquiring a low express or indirect cost of operation. This is usually achieved through the production of standardized products. By ensuring that the products are standard, the company will be able to achieve a minimal cost of operation and in eventuality maximize on its profits. Additionally, this strategy can enable the company to extend its market share by giving it control over the supplies. This can be accomplished through the linking of the company with other vendors to ensure that the inventories are kept at a low. 4.0 Ways of Strengthening the Competitive Position of the Company For a company to succeed in the market, it needs to have a strong competitive position. This mostly requires the company to be prepared for any eventualities and changes that may come along. This usually incorporates the formulation and implementation of strategies that give the company a competitive advantage in the market. According to Business Times (2012, par. 1), being ready for perceived changes in the market helps a company to face the situations as they come to be. In doing this, it is important to analyze the market competition. By assessing the rise in competition within the market, an organization can design strategies that will help it in advancing and evading the likely adverse effects that the changes could bring. For instance, the Indonesian palm oil company overcame the global financial crisis that hit the nation in 2008. This can be attributed to its level of preparedness, which has contributed to its growth and development to be one of the major producers for palm oil in the world. Aside from being prepared, a company can adopt many ways to strengthen its competitive position in the market. Providing a standard product to the consumers is one of the many ways a company can strengthen its competitive advantage. The ability to provide the consumers with a product that is standard and free of any malfunctions is paramount. As seen above, the quality of a product is mostly generated by the price of the same. Thus, when a company places high prices on its products, it is likely that their product is of a high quality and essentially, it is standard. Providing standard products to the consumers goes a long way in ensuring the company’s reputation is maintained as well as retaining the clients. This factor helps a company in marketing and promoting its products to other consumers. This is because of the word of mouth, which is likely to be spread to other consumers by the customers. It also ensures the company maintains a good relationship with the consumers. Additionally, it is important to ensure that the services being offered are of a high standard to match the quality of the products (Parvinen & Aspara 2007, p. 131). Another way of ensuring competitive advantage is by establishing follow up strategies. Follow up strategies help a company to monitor its progress. These strategies have commonly been noted to act as back up steps for a company. Despite having applicable strategies in place, it is important to ensure that there are a number of follow up strategies in place. This is because, a company needs to evaluate the way it is conducting its operations to ensure it is ahead of its competition. Considering the increase in market competition, it is important to design ways that will ensure its competitors do not overtake the company. In the current business world, companies seem to be copying from each other and using similar strategies to enhance their market share, by having a follow up strategy, the company will be assured of always being a step ahead of its competition. The need to monitor and evaluate the performance of the company contributes in a major way towards the growth and development of the company. These strategies help the company to have exit plans in case one of the implemented strategies fail to deliver as expected. They also help in planning for drastic changes that may rise in the course of the company’s operations. 5.0 Ways to Satisfy Customers and achieve Performance Targets The establishment of most businesses is to ensure the customer’s needs are met and satisfied. This is what forms the basis for establishing a business venture because it helps the company to identify the expectations of the consumer, and thus be able to deliver as expected. According to McLoughlin and Aaker (2010, p. 43), for a company to satisfy its customers, it needs to evaluate the market from their perspective. This strategy helps in the designing of an appropriate and readily marketable product. Looking at the market demand from the consumer’s point of view goes a long way in ensuring the company’s goals and objectives are met. First, this perspective helps the company to identify the type of product to produce. In this consumer need approach, a company is provided with a specific target market and segment. In essence, these specifications help the company in tailoring its products to suit the existing needs of the consumer. Another way of ensuring consumer satisfaction is by using the product use approach. Similar to the consumer need approach, this approach helps a company in ensuring that its resources are effectively utilized. By establishing the consumer use of a product, a company is able to produce the product in the desired manner, thus ensuring consumer satisfaction. Before venturing into the plantation business, the company needs to establish if the consumer target market has use for the products to be offered. This approach relates to the positioning strategy of the market. This is so in that, in positioning, a company needs to tailor its products according to the importance in use it offers the consumer. This approach goes in line with the need to dominate the market and ensure an upper standing in the market competition. In essence, the company needs to recognize the demand for the product in the market before investing in its production. In many instances, this approach has helped companies in minimizing their costs and maximizing on their profits (McLoughlin & Aaker 2010, p. 44). 6.0 Segmentation, Targeting and Positioning (STP) strategies of the company The market has been characterized to comprise of different consumers with varied needs and expectations. It is often difficult for an organization to meet all the needs and satisfy the expectations of its clients. However, by segmenting, targeting, and positioning the company, these market desires can be easily satisfied. Market segmentation incorporates the identification and division of the market into simpler portions. Taking into consideration the unique composition of the market, it is important for the company to develop distinctive measures of identifying the varied needs of the market to enable it achieve its goals. Segmentation mostly involves the identification of the needs of each consumer in the market. Operating on two varied levels places the company in a wider market range consisting of varied customer expectations and needs. By segmenting the market, the company will be able to identify the different and specific needs of its clients and thus, it will enable it to design ways of meeting those needs (Sasmita & Suki 2011, p. 5). Subsequent to this, is targeting. After identifying the specific needs of the market, the company is now able to determine the target market for its product. Targeting involves the evaluation of the identified market segment. In doing this, the company needs to focus on the general market attractiveness and the goals set to be achieved. Targeting helps in designing ways of meeting and satisfying the needs and expectations of the consumers as well as ensuring that the company’s resources are put to good use. By having a specific market segment, it is easy to offer quality services and ensure customer retention, a fact that has been proved by the common assumption of specialization. Targeting can be considered as specialization because it focuses on the specific needs of a specific market segment, this therefore helps in the improvement of a product and in meeting the needs of the consumers. This is because; the company is able to focus on a specific market niche. By targeting, the company saves on its cost of production and is able to maximize on the advantage of the market competition (Sasmita & Suki 2011, p. 5). Positioning of the market is the manipulation of the products and the market mix to form a desired impression in the mind of the end user. In market position, consumers are availed with varied product choices. In most cases, positioning helps the consumer to compare different products from different competitors and thus provide them with a wide range of options from which to make a choice. This usually includes attractive benefits and competitive advantage. In this case, it is important for the company to ensure that it offers unique products and services to its customers. One of the key ways of ensuring this market positioning will be to be able to deliver the products to the clients at the set time duration. Being able to beat the competition in the market place helps in ensuring the customer’s needs are satisfied, this can be achieved through offering attractive benefits (Sasmita & Suki 2011, p. 5). 7.0 Decision-making in a Complex Situation Managerial staff is usually faced with the difficult need to make decisions for the company. In most cases, these situations are complex and tend to demand a lot of critical analysis and evaluation of the situation before the implementation of the solutions. A number of these crucial areas include; decisions on production and operations, finances and the human resource management. Various ways can be implemented in making decisions that affect these areas. In a complex situation, it is important for the managerial staff to seek the opinion and views of other parties in the company. Matters that focus on the production operations for instance affect all the individuals in the company. It is thus vital to seek out the opinions of the staff and employees before making any major decisions. Most financial decisions are critical in their respective ways. The need to consult with the financial advisors is important in ensuring that the company makes the right decisions. In other cases where the decisions concern the human resource management, the leadership skills of the managerial staff often come to play. This could be the need to hire new personnel or training the existing staff. Being able to maintain an effective department of human resource enables a company in handling its operations as required and ensures that the goals and objectives of the organization are always considered. In any complex situation, there is often the need to take drastic measures, which will help in managing these situations before they evolve into major issues for the company. In achieving this, the company’s managerial staffs need to establish an organizational culture and behaviour that is in line with the company’s objectives. 8.0 Conclusion Strategic marketing appears to have major impacts in the life of any company. This is because of the effects it has on the company’s operations and consumer market. These strategies seem to be a long-term requirement for any company seeking to meet the needs of its consumers and to improve its operations. It is however important to ensure there are other follow up strategies that can be implemented in case the existing strategies fail to deliver as stipulated in the company’s objectives. Thus, the plantation company should implement these strategies to ensure competitiveness. 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