Key Areas for Marketing in a Competitive Environment Essay Example

or has potential for significant gains.The diversity of rivals with different cultures, histories, and philosophies adds instability to the industry.An industry shakeout occurs when new firms enter a growing market and incumbent firms increase production, leading to overcrowding.To effectively compete in this environment, marketers need to consider various dimensions such as customer services,pricing policy,distribution coverage,sales force strategy,and advertising and sales promotion programsThe marketer needs to analyze competitors' strengths and weaknesses in various areas such as research and development, manufacturing, purchasing, financial management, and more to anticipate their future strategies.

The text introduces the concept of primary marketing research, which involves gathering information from customers, suppliers, and dealers to enhance the company's products and services. It also mentions benchmarking, which entails comparing the company's performance to that of leading firms in other industries to identify areas for improvement.

Michael Porter's four competitive positioning strategies are then mentioned. The text emphasizes three successful strategies: overall cost leadership, where the company aims to have the lowest production and distribution costs in order to offer lower prices and gain a significant market share; differentiation, where the company focuses on providing unique features or benefits that distinguish it from competitors; and focus or niche market strategy, where the company targets a specific segment of customers.

Moreover, one losing strategy is briefly mentioned without further elaboration.

The main goal of the company is to become the industry's top player by developing a unique product line and marketing program. Instead of targeting the entire market, the company chooses to effectively serve specific market segments. It has been suggested that companies can achieve leadership positions by providing superior value to customers through three strategies: operational

excellence, customer intimacy, and product leadership. Operational excellence means leading in terms of price and convenience by reducing costs and establishing an efficient value-delivery system. Customer intimacy involves precise market segmentation and customization of products or services to meet specific customer needs. Product leadership focuses on offering innovative products and services that surpass both their own previous offerings and those provided by competitors. The marketer's plan will depend on whether their firm is a market leader, challenger, follower, or niche player.

In a market like this, the buyer holds the power to determine the price. While true monopolies are rare, there is often an imbalance between the producing industry and the buyers. The bargaining power of buyers depends on various factors such as: concentration of buyers (where few buyers with significant market share exist along with many sellers in the industry), proportion of output purchased by buyers (especially when the product is standardized), importance of quality and service, threat of buyers integrating backward or forward into the industry by acquiring the producing firm or its rival, and ease with which buyers can switch suppliers. The term "suppliers" refers to all sources supplying inputs required for goods or services provision. A producing industry relies on raw materials, labor, components, and other supplies provided by these firms. This reliance establishes buyer-supplier relationships between the industry and those supplying raw materials for product creation. If suppliers possess considerable power, they can exert influence over the producing industry by selling raw materials at high prices to capture a portion of its profits.

Barriers to entry in markets go beyond the regular adjustments that equilibrium typically brings. For example,

when industry profits increase, more firms are expected to enter the market and take advantage of high profits, which eventually leads to a decrease in profits for all industry firms. Conversely, when profits decrease, some firms are expected to exit the market, restoring equilibrium. Additionally, firms may choose to enter uncertain markets. Some firms keep prices artificially low to deter potential entrants. These barriers limit the entry rate of new firms and maintain a level of profit for existing industry players.

The barriers to entry include economies of scale (requiring a minimum size for profitability), high initial investment and fixed costs, cost advantages enjoyed by existing firms, customer brand loyalty, customer switching costs, restricted access to distribution channels controlled by existing firms, scarcity of important resources such as qualified staff, government regulations, access to technology, the likelihood of retaliation from existing industry players, and control of raw materials by existing firms. Moreover, existing firms often have established customer relationships.

Patents and proprietary knowledge are utilized in long-term service contracts to limit industry entry. Entry and exit barriers in an industry can be described as follows: Easy entry if there is common technology; difficulty in switching brand channels; low scale threshold.

The text discusses the ease of exiting and entering a market, as well as the barriers that affect this process. When it comes to exiting, it is easy if there are salable assets and low exit costs. However, it becomes difficult to exit if there are specialized assets and high exit costs. Exit barriers resemble entry barriers and can hinder a firm's ability to leave the market. This can intensify competition as firms are unable to leave

the industry. The dynamic nature of business is highlighted, with examples such as phone companies, computer firms, and entertainment merging and forming strategic alliances to adapt to changing market landscapes.

To counter the five forces, strategies can be formulated on three levels: Corporate level, Business unit level, and Functional or departmental level. The business unit level is where industry rivalry is primarily contested. At this level, three generic strategies (cost leadership, differentiation, and focus) can be implemented to create a competitive advantage. Choosing the appropriate generic strategy will help the company leverage its strengths and protect against the negative effects of the five forces.

However, it is important to consider the limitations of the five forces model. Organizations should not underestimate the importance of their existing strengths. The model also does not account for synergies and interdependencies within large corporations' portfolios. Additionally, the model does not address the possibility that an industry may be attractive because certain companies are a part of it.

Some argue that environments characterized by rapid, systemic, and radical change require more flexible, dynamic, or emergent approaches to strategy formulation. In certain cases, it may be possible to create entirely new markets instead of choosing from existing ones.

Many newer organizations lack understanding of expertise and experience, leading them to be unsure about committing to long-term campaigns. Consequently, these organizations often prioritize marketing as a secondary concern. Nevertheless, it is crucial for these organizations to have a well-defined plan and implement a marketing strategy. There are five steps that can be taken in order to establish an effective marketing strategy.
1. Step One - Situational Analysis: Prior to launching any marketing campaign,

it is vital to conduct a thorough analysis of the industry. This includes examining market share, growth patterns, trends, economic policies, and identifying existing competitors.

When analyzing a company's market share and growth rate, it is crucial to also identify the industry's top distributors and evaluate their discounting policies, strategic alliances, and other pertinent details. To make an informed decision, one must consider multiple factors including the marketing environment, laws and regulations, politics, current technology status, economic conditions, socio-cultural aspects, demand trends, media availability, stakeholder interests, competitor's marketing plans and campaigns. Furthermore, internal factors such as experience and resource availability play a vital role. PEST analysis and Porter's Five Forces model can also be employed.

In order to analyze competitors effectively, it is important to assess various aspects such as their teams, products/services, pricing, and marketing materials. It is essential for companies of all sizes to stay attentive towards their competitors. Creating easily-accessible document files will be advantageous in later stages for positioning and promoting the product. Likewise, (Ill) Distributors should collect comprehensive information about key suppliers or distributors that the industry depends on. This involves understanding their operations, team, pricing, and discounting practices. Forming strategic partnerships with crucial distributors can offer a significant competitive edge in the market.

Dell has successfully executed partnerships with Intel and Microsoft, which has greatly contributed to their success. In terms of internal assessment, this section provides information on the current market position of a developed or in-progress product/service line. It includes a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. This analysis helps determine areas where competition should be avoided and identifies major threats and potential opportunities

in the market. Additionally, it provides a closer and more accurate understanding of market demand through gathered data.

In order to complete this step, it is necessary to conduct thorough research as a team. This can be an exciting process! The second step involves determining the marketing objectives for the plan. These objectives should be specific goals that the organization aims to achieve. They may include increasing market share, acquiring customers, retaining customers, driving website traffic, or achieving a certain return on investment (ROI) for specific marketing tactics. It is important to carefully consider and connect these objectives to the major goals outlined in the business plan. The next part of the marketing plan will be developed based on the opportunities identified in the situational analysis.