The business has to consider several questions before coming up with the marketing plan: * Where Is the business at present? * Where does the business wish to be In the future? ; How will a business achieve Its objectives? A strategic objective is an extremely defined objective that the business must achieve if it wants to make its strategy succeed. There are certain factors that must be thought out before making a strategic objective. These are: * Growth * Revenue * Survival * Social responsibility Growth A business must decide if it wants to expand.
To be able to expand, a business must iris gain enough custom and income so they can afford to open new stores and headquarters. They also need to be able to keep these new premises open and gaining money. It would be no use to put a store into an area which is maybe deprived and a low potential customer rate as they won’t gain enough profit, therefore having to close. The growth strategy is aimed at gaining a larger market share, and it may require short-term earnings. Growth methods include diversification, product development, market penetration and market development.
It’s based on investing in companies and certain sectors which are growing rapidly. Revenue This strategy focuses on increasing the value of a business or product. It’s done by maximizing their near-term revenues and their long-term potential for revenue. This was put forward In the sass by William Bamboo, who argued that an objective of businesses could be to gain their most achievable sales revenue. This objective was especially welcomed by those employees whose wages were decided by the businesses sales. Survival At one time or another, each business will be concerned about survival. Most begin to grow.
The main aim for a new business in its first year is to survive. However, here are a few problems which new businesses may be faced with, such as; lack or experience, resources, competition, unexpected costs and limited customer recognition. In the early stages, the decision makers are also prone to making mistakes. During a recession a business could face reduced demand, difficult debts and a sink in confidence. Individual businesses may face difficulties due to competition, poor demand for their products/services and the results of bad decision-making. Some businesses become a target to be taken over by another, more successful business.
When this is happening, the businesses most important IM is to survive. Social Responsibility Recently, businesses are a lot more concerned about their image than before. They also find the benefit in appearing responsible to a wide range of stakeholders. Companies with well-known names do not want to public to think badly about them in any way. Companies such as Soda have made a serious attempt to change their image for the better in recent years. Soda tried to shake off its image of being the maker of “budget” and “unfashionable” cars by exploiting the name of its new owner.
When faced with competition, businesses will lose custom and sales if they neglect the needs of their customers. This has increased in better customer service and policies. Government legislation and trade unions have influenced the way businesses treat their employees, and laws have been passed to protect them. For example, The Disability Discrimination Act 1996 was designed to reduce discrimination against disabled employees. Legislation protects companies with high standards of responsibility from competitors who do not care for a safe working environment.
Businesses benefit from having a good relationship with their suppliers of raw materials and components. In manufacturing, companies are adopting “Just-in-time” manufacturing. This means that businesses only produce when they have an order, and they only get materials delivered when they are needed. Businesses require reliable and efficient suppliers to be able to order their stock last-minute. Nations Matrix Existing New Product development Market penetration Diversification Market development Markets Products Nations Matrix is a useful tool for analyzing the approach to the marketing strategy of a business.
The matrix puts markets against products and will suggest one of four marketing strategies for the business to follow. “Market penetration” is a relatively straightforward strategy, involving more sales of n existing product in an existing market. Existing customers need to be encouraged to buy more of the product or attract new customers. Businesses usually use different and effective promotional techniques or drop the prices to achieve this goal. “Product development” is the process of developing new products or services to sell in the existing market.
For example, yoghurt developers bring out a new range of low fat or low cholesterol yoghurt and milk drinks. “Market development” involves selling an existing product in new markets. This often means entering markets overseas and exporting successful products for the first time. This is quite a risky move as the business is entering into a new and unfamiliar market and the business has no idea of the reaction. “Diversification” is arguably the riskiest strategy as it involves selling new products into new markets.
Launching a new product or service into a new, unfamiliar market is extremely risky. The Virgin Group has moved from America into other parts of the world successfully and now has a large range of products and services in most parts of the world. Boston Matrix This was developed in the USA by the Boston Consulting Group as an alternative way f analyzing the performance of a product or service in the market. Low High Market Growth Market Share Cash Cow Dog Star Question Mark The “star” in the Boston Matrix count as products or brands which have high market share in a high market.
They generate a great deal of revenue for the business and increase reputation in the market. For example, Apple’s pod has a large market share in the rapidly growing market for downloading music off the internet. The “cash cow’ has a large market share in a low growth market. “Cash cow’ products often tend to be in the mature phase of their life cycle. They have a very familiar name to their customers and they generate high volumes of revenue for their business. In the market for breakfast cereals, Kellogg Cornflakes are the leading competitors, even though it’s quite a low growth market. Question mark” are products which operate in a high growth market but have been unable to gain large market share. It’s often possible to turn them into “stars” after making a few changes to the products marketing mix. However, these products are often removed from the market through fear of the failure reputation. “Dogs” are products which only have a low market share in a low growth market. They generate small amounts of revenue and they fete damage the reputation and image of their business. They are usually removed from the market in a bid to avoid wasting resources.
SOOT Analysts SOOT stands for: S threatens W nakedness O opportunities T wreaths Strengths Opportunities SOOT analysts Threats Weaknesses performing in its market. Strengths – These are the advantages that the business has over its competitors, such as having a higher quality product, good distribution network or original design. Examples of this are Urinary and Sony. Sony are well- known for having extremely good quality electrical products, and Urinary sell their airline tickets at a really low price. Weaknesses – These are the areas that the business is lacking opposed to their rivals.
A business may have a weaker channel of distribution or have a smaller range of products. Some businesses have a complaint or suggestion box in their store, or an area on their website for customers to have their say on what could be done better. It’s used as a way of highlighting areas of weakness in the business. Opportunities – These are circumstances that the business is able to take advantage of, such as an important rival going into administration, maybe a change in trends on the market. A relaxation of licensing saws would create opportunities for pubs and bars to open for longer into the night.