Businesses need a strong infrastructure and thus it is essential to incorporate the successful features helping to accumulate the growing outlook. Implement the optimistic features that enhance the overall trading opportunities. Make sure that the attributes exactly fit your business and meet your entire business specifications. Once, you start employing the feasible features you can see your business reaches the ultimate estimable position that represents the efficiency of your business. Continue reading
Typically marketing of services is done following the services marketing mix using the 7 Ps framework unlike the marketing of products for which the marketing mix involves the 4 Ps framework. Today, marketing has evolved over time into a discipline of its own. Over time marketing managers have realized the sustainability of pull marketing than the traditional approach of push marketing strategies.
The initial movement in marketing strategies was from a direct marketing scenario to brand marketing. In direct marketing, the marketing managers typically had a role of sales managers and the most important strategic focus was to ensure a incentive structure for the sales force, both internal salesmen and external salesforce (dealers, retailers, distributors) such that the one-to-one marketing could be done at the point of sales. However, it was realized that if a fraction of the sales force deviated or moved to another firm, the entire customer segment was lost to the business. The face of the product or service was essentially the sales force. Now as services gained in importance, it was realized that the differentiation of services was even more difficult based on tangible features like that of a product. This was when brand marketing started getting its due importance, where a pull strategy was implemented so as to “pull” the customer to the product or service based on his perception of the quality of the same.
However, with services gaining prominence over time, it was realized that the very definition of services was evolving as more and more services were being focused on internet or info-tech based services where direct interaction with the customer was lost. While branding definitely ensured that the customers develop a brand association with the service, sometimes the nature of the service is such that the essence of the service is a transactional one. So brand marketing focus gradually started to shift towards customer engagement and the benefits of social networks started getting conceptualized. This paved the way for the next generation of marketing, namely marketing using social media.
Since services cannot be differentiated purely based on features on offer, the major differentiation to create a brand association and thus customer engagement, is through tapping the social networks. In the internet economy, social networks are getting increasingly dominated by social media and thus marketing managers of even larger traditional “brick and sell” firms have started recognizing this fact and focusing their efforts on social media marketing.
The 7 S framework for digital marketing started gaining in prominence for services marketing strategists. While the dynamics of a pure internet marketing strategy is slightly different, the essence of the same has been captured in more comprehensive frameworks on digital marketing, which have been derived purely through the theories based on economic rationality.
Over time, it was realized that social media is perhaps the biggest tool today to lead a brand marketing strategy for many of the services and product categories, since in both cases, the target segment often uses the internet as a source of information (through websites or though the personal social network) while deciding on a service vendor. It is at the point of information search that social media marketing can create the largest impact and thus builds its reputation for having a high impact on “brand recall” at the “point of purchase”.
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To create sustainable, long-term value for all the stakeholders of a firm, it is important to explicitly establish an appropriate stakeholder value target. However what would constitute the “success” condition for all the stakeholders of a firm would vary from the goals of individual stakeholder. For an investor in a firm, value may be seen as through higher market price of his stocks and bonds, where as, for a mid level worker, value may mean better returns in terms of satisfaction from the job, maybe in terms of pay grade improvements or in terms of job satisfaction. Although, what constitutes “value creation” may be dependent on stakeholder perception, for a generic strategic framework, there is a need to conceptualize a generic framework to achieve a target so the value may be created for the firm as a whole, in strict strategic sense.
The key to reach this target and achieve a sustainable competitive advantage is the alignment of business strategy, financial strategy, technology strategy, marketing strategy and investor strategies. One such model developed in strategic management literature is that of Strategy Maps.
In Strategic Maps framework, value is created through 3 main organizational resources, namely Human Capital, Information capital and Organization Capital.
As depicted in this model, value for a firm is essentially created through the interaction of four processes, namely, “Operations management processes“, “Customer relationship management processes“, “Innovation processes” and “Regulatory and Social processes“. Under each process, there are lots of transaction level processes which create value. Monitoring and strategizing on the value creation of transaction level processes is the functionality of Mid Level management in the organization which may be termed as “Ploy for Value Creation“. Focus here could be “Ploys” for improving cost structure or improving asset utilization within the firm. The objective at this level is to focus on productivity enhancing strategies.
For the executive senior management, strategy formulation for the purpose of “Value creation” would have a different focus. Their objective could be to expand the revenue opportunities through entering a new market , decide a growth strategy for a product or market, or focus on Business Diversification strategies. In short, the role of the executives would be to evaluate various growth strategies for the firm, which could lead to huge revenues and thus economic value creation in the near future, upon realization of the plan post implementation of the strategy.
There are many other strategic frameworks for the creation of value for businesses which have their individual merits and limitations. Another popular framework for value creation is that of Prahlad et al. (2004)
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An international market entry strategy is defined as the planning and implementation of delivering goods or services to a new target international market. It often requires establishing and further managing contracts in a new foreign country. Few firms successfully operate their business in a niche market without ever planning to expand into new markets (mostly due to the localized nature of their Business) but most firms strive to expand through increased sales, brand awareness and business stability by entering a new market. Developing a win-win market entry strategy involves a thorough analysis of multiple factors, in a planned sequential manner.
There are 2 basic Strategic Frameworks for Market Entry Strategies which are all dependent on Product type and the Product Lifecycle.
These frameworks have been developed built upon the theories of Innovation Diffusion Models in monopoly and a competitive Game Theory frameworks based on theories of Business Economics.
The Waterfall Strategy
In a Waterfall strategy, the business is spread in international markets sequentially. First a firm enters a new market and establishes an identity in the same. Establishing an identity involves estimation of potential market size and revenue patterns, identification of target segment, creation of brand awareness, identification and creation of possible distribution channels and finally formulation and implementation of sales strategy. All these strategies at individual stage is dependent on the product type and the life cycle.
Once the product identity is established in the new market, the learning from the same is utilized to expand into another new market, somewhat with similar structure, sequentially. Learning is an iterative process in such a strategy formulation and it is a less risky process of expansion of business.
Typically, products with a longer product life-cycle or in the maturity phase would follow a Waterfall Strategy, for expansion into new markets.
The Sprinkler Strategy
Markets are approached simultaneously in the sprinkler strategy. While this is a more risky strategic framework for entering new markets, typically it is more suitable for products with a shorter life cycle (like Technology products) or are at the Introduction and Growth Stage of the Product Life Cycle. In such a strategic framework, markets are entered simultaneously and often a Skimming Product Pricing strategy is used to generate as much profits as possible from sales. Experiences from market responses are limited to individual markets and the same are not replicated in the other markets.
While there is a third Strategic Framework (Namely the Wave Strategy ), it is much less popular for its limitations.
Have you read the article on the Porter’s Five Forces analysis of industry competitiveness? This is a must-read article for anyone planning to get into a new market.
The Ansoff Growth matrix is a tool that helps firms decide their product and market growth strategy based on objective analysis of industry structure and product type. It is one of the more popular tools for strategic management analysis, in the scenario of deciding the case for a related diversification of businesses and firms, which itself is a highly risky strategic decision.
The Ansoff Matrix was modeled by Igor Ansoff. Ansoff was primarily a mathematician and an economist par excellence and is one of the earliest strategic management guru.
While the application has been explained in details in the previous diagram, it is crucial to understand that the Ansoff Matrix is completely a framework for Market Entry Strategy. The framework attempts to minimize the risk associated with businesses attempting to enter new markets.
A major limitation of this framework is that it does not take into consideration the factor of what stage in the life cycle (PLC Curve) the “Product” is currently as, while objectively trying to analyze the best strategy for market entry.
By the way, did you read out article on the frameworks for market entry strategies
Also do you know how the internet affects Porter’s generic strategy models