Strategic Development and Marketing Strategies

STRATEGIC DEVELOPMENT AND MARKET ENTRY STRATEGIES

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Strategic Development and Market Entry Strategies

Strategy Development

A market entry strategy and strategic development is a method designed by a company to deliver or distribute goods or services into a new target market. In the case of exporting or importing goods and services, it refers to managing and establishing contracts in a foreign nation. Many organizations operate successfully in a niche market environment without the need to expand to new markets. Some organizations achieve increased brand awareness, sales, and business stability by making new entries into new markets. In order to develop a market entry strategy, there is need to carry out a thorough analysis of possible customers and potential competitors (Lymbersky, 2008, 90-1). Some of the major factors to put into consideration when deciding on the viability of the entry strategy include price localization, competition, localized knowledge, trade barriers, and export subsidies. According to Kusuoka and Maruyama (2010, 112-3), the decision of whether to enter and when to enter a particular market will majorly depend on the company’s financial resources, the nature of the product, and the product life cycle. There are several strategies adopted by different companies depending on the favorable strategy and financial ability. However, the most common entry strategies adopted by most companies include: Directly exporting products, sales outsourcing, indirectly exporting products using middlemen, and producing goods in the target market. Other entry strategies include licensing, franchising, exporting, joint ventures, Greenfield project, alliances, and wholly owned subsidiaries (Lymbersky, 2008, 98).

Among the entry strategies listed above, the simplest and most commonly used is the aspect of exporting, which involves the use of either indirect method such as countertrade, or direct method such as the use of an agent. Other complex forms, which involve global operations may include: Export processing zones or joint ventures. Kusuoka and Maruyama (2010, 78-9) assert that when a company has settled on a decision to enter into a new market, there are so many options open to it. The options will in most cases vary in the risks involved, costs likely to be incurred, and to what level the company can exercise control over such options. After the company has decided on the entry strategy to adopt, there is need to decide on specific channels to adopt. Most agricultural products of a commodity nature or raw materials normally make use of distributors, agents, or involve the government, while processed materials majorly rely on sophisticated forms of accessibility. A company that is wishing to enter into a new market is faced with three major issues. The first issue is marketing, which describes how countries and segments can manage, co-ordinate, and implements marketing effort. It also entails how to enter the market; directly or with intermediaries, and with what kind of information. The second issue is sourcing, which describes whether or not to obtain products, to buy, or make the goods. The last issue in this aspect is control and investment, which entails joint venture, acquisition, and global partner. It involves the company deciding on how far it wishes to control and direct its own fate. The degree of attitude, risk involved, and the capability to achieve goals and objectives in the targeted markets are some vital facets on deciding whether to offer a joint venture, to license, or to carry out a direct investment (Kusuoka & Maruyama, 2011, 88-9).

The decisions made on the issue of marketing majorly focus on value chain. The entry alternatives or the strategies adopted by the organization must make sure that the required value chain processes are integrated and performed. When making decisions or forming strategies to enter an international market environment, there is need to pay a detailed attention than in the case of domestic marketing. In the case of entering into new foreign markets, there are a number of strategies that can be adopted to ensure a successful penetration (Keillor & Wilkinson, 2011). The first strategy is to adopt a technical innovation, which involves the production of goods that can be demonstrated and are superior to other products in the target market. The next aspect is the product adaptation strategy, which involves modification of the existing products to fit into the requirements of the target market. This would ensure that the products of the company do not appear irrelevant in the target market.

The other strategy is the aspect of security and availability strategy, which involves putting in measures that would ensure that the company overcomes transport risks by addressing potential risks. The next strategy is the low price strategy, which is the price set by the company to enable it to penetrate into the new market. The company needs to set low prices compared to other companies in order to appeal to and attract its target customers. The last strategy in this aspect is the conformity and total adaptation strategy, which involves the company adapting to the requirements and the conditions set by foreign producers and distribution. There are normally major problems involved when less developed countries strive to market their products in developed nations. Customers in the foreign countries are normally careful and conscious of factors such as currency, quantity, transport costs, and quality of products. Some commodities such as agricultural commodities involve enormous use of resources such as infrastructure since their marketing and production are interlinked (Keillor & Wilkinson, 2011, 78). This may at times surpass the scope of private companies thus calling for the involvement of the government.

Implementation

Extended marketing operations involve a marketing mix or business tools used by marketers in marketing. The marketing mix is very significant in determining the brand or the product’s offer and associated with four P’s that include product, price, place, and promotion. This concept majorly focuses on placing the right good in the right location, at the correct price, and at the right time. It involves creating a product required by a particular group of individuals and placing the product at a place that is regularly visited by those same people (Grünig & Morschett, 2012, 97). The product should also display prices that match the value attached to the product by such individuals; this should be done at a time when the individuals are willing to buy the good. However, a lot of work is required in finding out what the target customers really want and locating the places they do their shopping. One needs to figure out the methods involved in producing the product at a price representing the value of the product as perceived by the customer, and at a critical and relevant time. The elements go hand in hand in their operation and getting one element wrong can spell disaster (Grünig & Morschett, 2012, 102-3).

Looking at the first element (product), it should be noted that a company can only sell what is specifically required by the consumer. This implies that marketers should be able to study and understand the needs and wants of the customers and be able to attract them with a product that they are willing to purchase. The marketer needs to tell what the customer needs from the product or service and how the product satisfies the target customer. The marketer should also be able to determine where and how the customer will use the product and how the product should be differentiated to counter the products of its competitors. The second element in this aspect is “price”, which reflects the product’s total cost of ownership. Many factors affect price such as the consumer’s cost to change or the cost incurred in implementing the new product. It also involves the consumer’s cost of not choosing the product produced by the competitor. The marketer should be able to determine whether the customer is price sensitive and how the company’s price will compare with that of its competitor (Capass & Bakstein, 2012, 89).

The next element is “promotion”, which involves manipulatively talking to the target customers with the aim of making them purchase the company’s product. Promotion can take the form of advertising, viral advertising, personal selling, public relations, and any other forms of communication taking place between the consumer and the company. The marketer should be able to know how the company’s competitors carry out their promotions and how they are likely to influence the company’s promotional activities. The next element is “place”, which describes where the product can be gotten by the customer. With the rising use of internet, credit cards, catalogs, and mobile phones, people see no need of moving to any place in order to satisfy their needs or wants. The customers also have several places where they can satisfy their wants and needs. The marketer should be able to determine how the target customers prefer to purchase and how to access them in order to provide convenience to buy. With the rise of hybrid models of purchasing and the internet, “place” is slowly becoming irrelevant. According to Capasso & Bakstein (2012, 96-7), the concept of convenience and place strives to focus on the ease of finding the product, buying the product, and accessing relevant information concerning the product.

The marketing mix model can be used by the company on deciding how to take a new product into a new a market. It can also be used to test the company’s existing marketing strategies and determine their relevance to the company’s goals and objectives. According to Barnhart & Smith, 2012, 112-3, regardless of whether a company is considering an existing offer or a new one, there are definite steps that need to be followed in order to define and promote the company’s marketing mix. The first step is to identify the product or service under consideration. The second step is to analyze and answer the questions on the 4 P’s as discussed above, and the third step is to try asking “what if” and “why” kind of questions to try challenging the offer. For example, asking a question such as what would happen if the price was dropped by 5%? The last step in this aspect is to try “testing” the whole offer once a well-defined marketing mix has been put in place. This can be based on asking consumer based questions, such as if the mix meets customer needs and whether the price charged for the product is favorable for them (Barnhart & Smith, 2012, 88-9).

Critical Reflection

In order to achieve the objectives of designing new market strategies discussed above, there is need for the company to employ superior marketing strategy. By positioning the brand or product correctly, the product will most likely become successful in the market better than the competitor’s products. Even with the best form of strategies, it is necessary for marketers to properly execute their programs in order to achieve extraordinary results. The marketing strategy adopted should also be creative in order to improve the marketing results. The marketing plan may not likely succeed if there is no marketing execution on the models adopted. Improving how marketers enter into new markets can significantly enable them achieve great results without having to change their strategies altogether. At marketing mix level, the marketers can make improvements on their execution by making little changes on the 4 P’s (price, product, place, and promotion) model. Such small changes can be made without having to make changes on the strategic position (Backman, 2004, 56-7). At program level, the marketers can improve their performances by executing and managing their marketing campaigns in a better way.

It is normally believed that adopting a consistent marketing creative strategy across different media (such as Radio, TV, Print and Online), can enhance and amplify the marketing campaign effort. The marketers can also improve their effectiveness in the marketing programs by improving direct mail or editing the contents of the website in order to improve on organic search results. There is also the aspect of marketing infrastructure or the marketing management, which involves improving the marketing business. It should be noted that management of budgeting, motivation, agencies, and co-ordination of marketing practices can result in improved results and improved competitiveness. In the view of Backman (2004, 102), the business results and accountability for brand leadership is normally determined by the effectiveness of brand management. Some factors that should be taken into consideration are the exogenous factors, which often determine how marketers are able to improve their results. Taking advantage of interests, seasonality, or regulatory environment will help the marketers design methods of improving their marketing effectiveness.

References

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