The purpose of this report is to investigate the planning principles and the range of tools and techniques involved in developing a marketing strategy.And to explore the implications of changes in the marketing environment for organization.In order to research the marketing strategy,it is very important to do the situation analysis.
The first step in strategic marketing planning, situation analysis involves analyzing where the company's marketing program has been, how it has been doing, and what it is likely to face in the year ahead. Doing this enables management to determine if it is necessary to revise the old plan or devise new ones to achieve the company's objective.
Situation analysis normally covers external environment force and internal nonmarketing resources. A situation analysis also considers the groups of consumers served by the company, the strategies used to satisfy them, and key measures of marketing performance. As the basis for planning decision, situation analysis is critical. But it can be costly, time consuming, and frustrating.
Use Starbucks as an exanmple
Starbucks is a multinational coffee and coffee house chain company founded in 1971 and based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 15,011 stores in 42 countries. Starbucks sells drip brewed coffee, espresso-based hot drinks, snacks and items such as mugs, and of course their well renowned coffee beans. This analysis will provide an overview of Starbucks and its industry; examine the current market and future market conditions and suggestions for maximizing the organization's future profits and growth.
Starbucks has expanded rapidly over the years, opening a new store every workday during the 1990's. The first Starbucks location outside of North America opened in Tokyo in 1996. In 2003, Starbucks completed the purchase of Seattle's Best Coffee. Currently there are over 172,000 employees of Starbucks, and the company's 2007 revenue exceeded $9.4 billion. During this year Starbucks will purchase more than 300 million pounds of beans from Latin America, Asia, and Africa (Laidlaw, 2007).
The objective of Starbucks is to become the most recognized and respected brand of coffee in the world. To achieve this goal, Starbucks plans to continue to expand its retail operations rapidly in two ways. Starbucks retail objective is to become a leading retailer and coffee brand in each of its target markets by selling the first quality coffees and related products. In addition, Starbucks provides a superior level of customer service, thereby building a high degree of customer loyalt
Starbucks is a highly innovative company, always striving for improvements in all aspects of their company. They have always been open and honest with the general public about how their company operates. They not only focus on their retail stores, but they are also concern about where their products come from. Since the beginning, Starbucks have focus on profitability, while simultaneously keeping their values and ethics. To Starbucks, corporate social responsibility is not about writing a check to a charity or a nonprofit organization, or having their label at every charitable events, it is based more on how they run their business everyday. This can includes examining the external and internal factors that relates to the well being of their company and their community.
Starbucks emphasis on conservation has created many benefits for Starbucks and for the environment. Not only are they preserving resources, which are great for the environment, but it also benefits them since it reduces cost. Starbucks even works with the group called the Green Team, which ensures that all stores that bear Starbuck's name are operating in an environmental way.
Starbucks also pays close attention to the source of their products. They do their best at ensuring that their products are grown in an ecologically sound manner. It is also critical to Starbucks that the coffee farmers are treated fairly and given fair wages. Starbucks also invest in the farming communities where its' coffees bean are produced; as a result, their coffee beans are of high quality and taste. They also provide their producers with a guideline on how their business should be done. Starbucks has made it a point that they only do business with farmers who run their business in a socially responsible fashion. Starbucks also feel that giving back to the community from where their coffee beans comes from is essential to ensure the quality of their products, thus they also fund many underground project which also creates an incentive for producers to meet the quality, social and environmental criteria that Starbucks strongly upholds.
A marketing plan for Starbucks Coffee Company for the introduction of a new line of tea to the beverage menu includes a multi faceted approach. Beginning with an organizational overview, and following with the new product description, SWOTT analysis, marketing research, segmentation, differentiation and positioning, product life cycle, the marketing mix, budget, and finally, control mechanisms, the marketing plan comes to life.
The organization strives to continue marketing to all consumers by introducing products that raise consumer interest from all types of people. Starbuck's does not use a major commercial advertising campaign to drive its sales. Instead Starbuck's can be seen everywhere. The Starbuck's cup is the most effective marketing and advertising tool the company has to this day. One can find a Starbuck's cup in movies and in television series. Additionally, sales are driven because someone in most companies across America is tasked with making the classic "Starbuck's stop" in the morning. Each year the company has seen phenomenal gains. Last year alone net revenues increased 20 percent to $6.4 billion. The company feels that by staying aggressive it can keep growing successfully every year.
Starbucks is primarily focus on a breakfast and afternoon snack stop to lunch and evening.
Starbucks is still focused on opening new stores.
In order to continue and maximize growth, Starbucks has entered the international market. In most countries, Starbucks chooses a local business partner to help them set up supplies and to understand the market and culture they are dealing with. This allows Starbucks to localize their retail operations, catering to the specific culture i.e. serving green tea in their Japan retail stores. There are important considerations that need to be made operationally, when they expand into new countries. According to Hanna and Newman Operations Management, on the international level, there are international trade issues, market access, labor, supply and legal issues, political concerns, cultural and quality of life issues that need to be addressed.
Different between e-business and e-commerce
E-business and e-commerce are terms that are sometimes used interchangeably, and sometimes they are used to differentiate one vendor's product from another. In both cases, the e stands for "electronic networks" and describes the application of electronic network technology - including Internet and electronic data interchange (EDI) - to improve and change business processes (Bartels, 2000)
E-commerce or electronic commerce is carrying out business communications and transactions through computers and over networks. It involves buying and selling of goods and services through digital communication. E-commerce also includes transactions on the World Wide Web and the Internet and means such as electronic funds transfer, smart cards and digital cash. E-commerce covers outward facing processes that interact with customers, suppliers and external partners such as sales, marketing, delivery, customer service, purchasing of raw materials and supplies for production. It involves new business models and the capability to gain new revenue. So E-commerce is a subset of e-business.
Ford Motor Company is the world's largest producer of trucks, and the secondlargest producer of cars and trucks combined. Ford has manufacturing, assemblyor sales affiliates in 34 countries and Ford companies employed 337,800 peopleworld-wide in 1996.
Ford has manufacturing facilities in 22 countries on 5 continents, with 87 plants in North America and 41 in Europe. In Europe, in 1995, Ford's combinedvehicle market share, at 12.2%, was the highest for eleven years, with three ofthe eight best-selling cars. In 1995, in the United States, five of the ten top-selling vehicles were Ford, including the best-selling car (Ford Taurus) andbest-selling truck (F-series).
On January 1, 1995, Ford merged its North American Automotive Operations and its European Automotive Operations into a single organization, Ford Automotive operations. Instead of being organized by geographic regions, the Company is now realigned by product line, with five Vehicle Centers, each responsible for one group of products worldwide. At the same time, Ford is reducing the time taken to develop a new vehicle from 48 to 24 months and reducing engines, transmissions, and basic vehicle platforms by 30% worldwide. Ford hopes that by pooling global skills and resources will result in more variations on each vehicle platform, increasing the number of vehicles introduced over the next five years by 50%.
Analyse ford's current position and strategy
Ford's company culture by that time was 'making cars that everyone can have one' and the biggest selling point for their product T series was low price which really made most of people in USA could afford to buy one car from them.
Big market share increased to 55% by this strategy, but in the later 20 years this strategy also made their market share felled 35%.
Conclusion is market prediction is more important then reduce cost.
Ford faced their sales lost with anomies amounts. Therefore a strategy changes was need immediately. Ford made five main changed with their company's structure.
- First is improved their management communication level;
- Second was improved company culture which would directly increase their employers' self-motivation;
- Third was Renounce strategy, stopped their weakest link which was Gas & Oil sale department and transferred this asset into an investment capital for extension their luxury car series projects which was inmogy other market known in luxury car company to steadily improving their market share in this area;
- Fourth was accurately predate future market and rearranged their investment direction, as example said before, an anomies capital was invested in to improve their luxury car market;
- Joint Production Strategy, was improve their market costing competitive.
Latest market strategy for their new production car F-150. Sales fallen in 21.1 percent compared with their same series products at the same time in last year. Reasons for fallen.
- High Gas Price;
- Slow economy, families reduced their expenses on luxury stuff since the recession;
- Competition pressure from their competitors like GM, Toyota and Dodge;
Solutions for the sales fall will be improving consumption for fuel by new engine models.
Analyse the marketing aspects of the problem
Ford Motor Corporation (FOMOCO) in the time span between 2005 to mid-2006 reversed course and profitability almost 180*. From a profit generating sales in 2005, to nearly $13.2 billion in losses in 2006 (FOMOCO, 2008, 2007 Annual report), Ford lost its #2 position in market share and slipped to #4 within less than one year.
Ford's problems are poor NPD, excess capacity, and failure to cut costs and to recognize and respond to market segmentation. For example, its capacity was 2.25 million vehicles but its sales only 1.7 million. Similarly, $30 billion sales delivered only $28 million profit. In 1990 demand for new cars in Western Europe was 10 million units and had grown 50 percent by 2000: in contrast Ford's market share grew only 5 percent.
These problems were made worse by Ford's attempt to globalize by merging Ford America and Ford Europe into Ford 2000. The strategy was bold - annual costs would be reduced by $3 billion, for example - but led to increased centralization. All decisions were made in the US and focused on Asian and Latin American expansion. In addition, the Ford range was old and had no products in areas such as sports cars or MPVs. The only success story was the Focus - 60 percent of 500,000 global sales were in Europe. In contrast, top end and economy models - the Scorpio and the Fiesta - were failures.
Change in the marketing environment
Change is inevitable and companies that wish to maintain a market-led approach must take into consideration both cyclical and evolutionary change when developing their marketing strategies. The rate at which the external environment changes varies according to the nature of the business but increasingly all organisations are facing escalating levels of change.
Change is inevitable. To survive companies need to adapt and to convert the threats caused by the changing environment into opportunities in order to avoid 'strategic drift'.
The airline industry is facing one of its most challenging environments in history. A global economic recession coupled with the terrorist attacks of September 11, 2001 have led to a decrease in passenger traffic, reduction in revenue per mile flown, and rising labor costs. Additionally, a collapse in pricing power and a shift in the buying behavior of business travelers, coupled with fierce competition from low cost airlines, are forcing major airlines to restructure their operations or face the prospect of going out of business. The airline industry has responded to this difficult environment by taking measures to reduce their costs. Airlines announced layoffs involving more than 100,000 employees immediately following the attacks. To make matters worse for the industry, the Federal Aviation Administration (FAA) predicts only a gradual recovery in passenger traffic during the coming years.
The Uk airline industry went through a deregulation process in 1977. Prior to deregulation, 34% of all passengers did not have a choice of selecting an airline and domestic carriers transported 240 million passengers annually (TIA.org website). After deregulation, 85% of all passengers in the Uk had a choice of two or more carriers and traffic increased to 640 million passengers annually . The growth in the number of passengers flying can be attributed to increased competition, innovations in marketing & operations resulting in lower cost of flying, introduction of new services and improvements in service quality. The industry became a perfect competition marketplace in that no single firm can influence the price of the product, consumers (for the most part) view the products of all firms as perfect substitutes and consumers will purchase a product from the firm with the lowest price.
In late 1990s, during the technology bubble and the increased globalization of business, the airline industry grew at a rapid pace. However, the industry has suffered quite a few setbacks after experiencing that boom.
Private Label brands - otherwise known as Own Brands - have come a long way in the past few decades. In the late 80's, the terms 'generic' and 'private label' were used to describe any product that was known to be cheaper and of lower quality than branded goods. Since then, Private Label brands have established their own identities, becoming popular consumer choices globally
Growth of Private Label is much higher in emerging markets than it is in established ones,.The most common reason for choosing Private Label is price perception. Strangely, Private Label prices appear to lack consistency, with the country's top 10 Own Brand prices varying dramatically in terms of their relation to the rest of the category. The second most popular reason is quality. Dix points out the need for manufacturers to focus on value for money offerings which could potentially counter the growing competition of Own Brands.
Private label CPG, bolstered by a turbulent economy, is increasingly being embraced as mainstream products, with the familiarity and relevance as national brands in some categories.
Retailers should continue to support private label initiatives with feature ads and displaybased merchandising to raise awareness among prospects seeking low-cost incategory alternatives
Private label share of spending is highest in the grocery channel, but dollar and drug retailers are also seeing healthy share growth.
In conclusion, Marketing it the process of planning and executing the conception, pricing, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives". (Rodda 1992:1) "If businesses are to succeed, they must implement the appropriate marketing strategy.
- STEPHEN P. ROBBINS ORGANIZATIONAL BEHAVIOR, NINTH EDITION
- LEE J. KRAJEWSKI LARRY P. RITZMAN. OPERATIONS MANAGEMENT, SIXTH EDITION
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