With an increase in technological advancements, most international and local markets have become dynamic. Such technological advancements have changed different factors in the market, influencing the strategies used by most organizations to be competitive, reach new markets, and build their market share. Moreover, a strategy that is effective today may not be applicable after a certain period. Therefore, organisations need to keep finding new marketing strategies that will enable them to compete favourably. Changes in both the external and internal environment of a business determine the future of the business. Understanding such key factors and ways of managing them effectively may determine the success of the business.
In essence, this paper aims at explaining the principles of strategic marketing management, discussing the tools used to come up with an effective strategic marketing strategy, and applications of the techniques used in strategic marketing. The paper also discusses ways of responding to changes in the marketing environment. The strategic marketing techniques used by Apple Company have been identified as well as the strengths and weaknesses of the strategies. Ways of responding to the changes in the external environment have also been discussed.
Task 1
The Role of Strategic Marketing in an Organisation
Strategic marketing is a process comprising of analyzing market competition, environment, and other business factors that affect the business (Foxall, 2014). The process also involves identifying market opportunities, possible threats, forecasting on future trends, setting business objectives, and formulating business and corporate unit strategies. The marketing strategy of an organization combines its marketing goals into a comprehensive plan. A well-prepared marketing strategy should consider information from the market research (Foxall, 2014). Additionally, the strategy should focus on the right mix of products so that maximum profits can be achieved and that the business remains sustainable in the long run.
Hollensen (2015) states that strategic marketing refers to how the marketing objectives are achieved; for instance, by product improvement, acquiring a different competitive company, by reducing prices, or by conducting intensive advertising. Strategic marketing should lead an organisation towards achieving attractive economic opportunities, which are adapted to the firm’s resources and offer potential for profitability and growth. According to Wilson and Gilligan (2012), the term could also be defined as feasible, appropriate, and consistent principles, which an organisation works to achieve its profit and customer objectives in a given competitive environment.
Foxall (2014) posits that strategic marketing first starts by assessing the current situation of a firm, conducting market evaluation, situational analysis, and the environment while aiming at identifying opportunities that may enable the organisation to achieve its objectives. The process of strategic marketing therefore involves deciding which marketing strategies should be used based on target market segments, policies, positioning, and objectives of the organisation.
Different aspects of a marketing plan are interrelated meaning that change of one aspect affects others. It, therefore, means that coordinating different marketing activities helps to maximize profits and to eliminate any form of interference. The marketing strategy is important because it considers all selling activities by ensuring that all departments in an organisation work according to the set goals and objectives. Understanding ways of creating a good marketing strategy helps business leaders to make well-informed decisions about certain marketing tactics (Foxall, 2014). Below is a discussion of the importance and roles of a good marketing strategy in an organisation.
Strategic marketing helps to streamline the development of a product. In other words, it helps business managers to create services and products with high chances of deriving huge profits. Using this strategy helps to ensure that profits are made because the process starts with conducting marketplace research, considering the optimal target customer, the strategies used by competitors, and emerging trends (Hollensen, 2015). Getting information on such factors helps organisations to determine the benefits that clients and customers want, and the amount of money they want to pay (Hollensen, 2015). The strategy also allows managers to understand how they can differentiate their services and products from those of competitors.
Understanding how to set the right price is crucial if a business is to compete favourably. Strategic marketing helps to determine how to set optimal prices offered by an organization (Foxall, 2014). The marketing strategy helps to set the right price for services and products based on market research findings. For example, if consumers want high-end products, the pricing strategy will involve selling commodities at prices that show what is offered is of high value (Foxall, 2014). If the target customer is willing to only buy cheap products, then the pricing of commodities will be done to ensure that it also favours such individuals.
Hollensen (2015) states that effective distribution is also another benefit of strategic marketing. Once an organisation decides the features of its products, the target customers, and the price of each item, it can easily select its business location where sales will be maximised. For instance, due to technological advancements, young people prefer shopping online or paying for services and products using credit cards or PayPal. On the other hand, older customers usually find it easy to do shopping at retail outlets. Such an understanding derived from marketing strategies enables an organisation to decide the type of business it will operate in a given area.
Conducting market research helps a company to create the image or brand it wants to establish. Without carrying out a strategic marketing plan and marketplace research, a company may respond to various solicitations from sales people advertising on reactionary individual basis, and sending messages that are not necessary in brand identity. An appropriate marketing strategy lets business mangers to determine the type of advertising media that best suites its brand (Hollensen, 2015). For instance, a business may find it advantageous to use social media than radio stations and magazines for advertising.
If an organisation has a well-prepared marketing strategy, the departments of the business work effectively with each other since they are all using the same plan. For instance, advertising team will talk to the product development team to determine the type of message it will pass to customers to ensure that products and services are perceived positively (Foxall, 2014). In addition to that, the sales team will communicate to the public relations team to find out whether they can offer coupons or discounts while still maintaining a good reputation of the business.
Some of the key concepts in strategic marketing include; marketing, strategy, and strategic marketing. Marketing refers to the organizational function and processes set for communicating, delivering, and creating value to consumers as well as managing customer relationships to benefit the company and its stakeholders. Marketing can also be defined as the process of executing and planning the promotion, pricing, distribution of ideas, services and goods, and creating and exchange to satisfy both organizational and individual objectives (Foxall, 2014).
On the other hand, a strategy refers to determining long-term objectives and goals of an organisation, and finding activities to take and proper allocation of resources for ensuring that the set goals are met. The term could also refer to the plans made by the management team to ensure that the organisation attains outcomes that are consistent with the goals and missions of the company (Wilson & Gilligan, 2012).
The first step while conducting strategic marketing is to determine why an organisation exists and ways in which it can benefit consumers in a sustainable manner. This involves setting the mission statement that will anticipate the future and make a description of the organisation’s services, products, and expertise. The next step is conducting the situation analysis of the organisation to prioritise and to evaluate their threats, strengths, opportunities, and weaknesses (Foxall, 2014).This activity helps managers to understand the available resources and resources.
After conducting the situation analysis, an organisation should set its marketing objectives. The marketing objectives are measurable goals giving decision makers a framework for assessing the progress made and making choices. Objectives are expressed in terms of quantitative targets such as market share, revenue, sales, or profits (Wilson & Gilligan, 2012). It is important to ensure that the set objectives can be achieved within a specific period.
Strategy development should follow after setting organizational objectives. Foxall (2014) also notes that this activity involves carefully choosing the target market and the type of customers who are willing to buy the company’s products. Skilled planners should also choose implementation techniques. The planners should also choose strategies of using the tools of the marketing mix which include price, product, promotion and distribution as to reach targeted consumers and influence potential buyers. Evaluation of the organisation should then follow to specify when, whom, and how the tactics developed will be assessed and monitored.
Task 2
Positioning within Strategic Marketing
A positioning strategy in marketing refers to the deliberate branding process or plan, which mainly operates on different levels of the consciousness of consumers where associations and meanings hold weight. Market positioning strategies are built on the firm’s data and looks for ways of composing the terms to balance various concepts of distinction, differentiation, and similarity. A positioning strategy also refers to long-term efforts of solidifying the identity of a firm, its services and products and the understanding of target audience (Hollensen, 2015).
Apple Inc. is an example of a company that sets the price of their products higher than those of competitors to create a perceived value. Most consumers will prefer buying products from Apple Company than their competitors. Such consumers tend to believe that the high price is due to high quality. The company may also benefit if it markets its products to a specific demography (Apple, 2017). For instance, it may produce devices that are appealing to a certain group of consumers and make a similar product for another group of consumers. Apple can also use a different distribution strategy to improve marketing. Products can be made available for sale in specialty stores and pro shops.
Positioning drives marketing and strategy because it leads to the creation of a target audience. The marketplace for customers is vast. According to Kotler (2012), segmentation should come first during positioning because it helps to identify the consumers with similar demographics, needs, and buying habits. When positioning products, it may be quite challenging to create marketing strategies. Target customers should be defined and the applicable strategy. Additionally, targeting strategies involve searching for customers who are willing to buy products. Sometimes, it is important to create a need that customers are not aware of at first. Positioning on the other hand establishes the position you want to be in the future. Strategic marketing creates a brand concept through understanding the demographics and psychographics of the targeted market.
Strategic marketing takes a long time and defines the marketing activities of an organisation. The process aims at developing effective responses to a dynamic business environment by segmentation, analyzing the market, and evaluating the activities of competitors. The strategy involves focusing on positioning products and defining market segments to create a competitive stance (Kotler, 2012). A good marketing strategy embraces components such as the communication and distribution strategy.
Tactical marketing takes a short time and involves daily marketing activities. This type of marketing helps to translate strategies into specifications thus representing ongoing operational activities of the marketing strategy. Tactical marketing deals with separate components of different elements of marketing such as advertising and sales promotion (Kotle, 2012). All the problems encountered are usually well structured and repetitive because data is generated internally.
A relationship marketing strategy is quite helpful in businesses because it leads to increased productivity and profitability. For instance it leads to consistent customer experience. Companies, which are interrelated work together and share information to make sure that the needs of their clients are adequately met. This strategy is helpful where consumers constantly face challenges with certain services and products (Peck et al., 2013). Since issues are resolved within a short time, customer satisfaction and trust is gained.
Relationship marketing helps to get feedback from customers. If the culture of an organisation facilitates cooperation, complaints, open communication, and consumer concerns solutions can easily be reached (Peck et al., 2013). By paying attention to negative and positive trends, firms can use such feedback to make appropriate changes to service or product offerings thus ensuring that customers are fully satisfied.
Relationship marketing also improves customer profitability. Constant communications motivate consumers to apply complement of service and product offerings. Since customers understand the advantages of offerings, they tend to become loyal to the organisation in the long run. Satisfied customers share information about the business with others thus increasing the market base (Peck et al., 2013). Additionally, consumers consult each other for recommendations and suggestions. Relationship marketing helps consumers to share experiences thus increasing the popularity of a business.
Relationship marketing also helps to enhance innovation. Organisations also invite consumers to give ideas about products. The information gained helps companies to know which helpful adjustments they should make in terms of improving their products and services. Also, consumers are given a chance to vote, share, and discuss the ideas they have so that they may make well-informed decisions (Hollensen, 2015). Different organisations use different ways of sharing their insights and ideas.
Task 3
Key Factors and Trends in the External Environment of Apple Company
The external environment of a business is composed of uncontrollable forces that are not within the organisation. According to Kotler (2012), such forces significantly influence the business because the owner of the business has little or no control over them. However, business owners and managers can respond to such forces by adapting to them appropriately using the controllable internal environment. Some of the external key factors that may affect a business include; natural forces, government policies, demographic factors, cultural and social forces, and technological changes.
Some of the uncontrollable factors in Apple Company include geopolitical uncertainties, health issues, war against terrorism, and authority to work. Apple Company has outlets in countries such as Ireland, Cork, Korea, China, and Czech Republic. If there is political instability in such countries, there could be delays in the manufacturing process. Such delays may inconvenience consumers. Since Apple is one of the major American technology companies, it has accumulated huge amounts of cash. As of June 30, 2015, the company had $34.7 billion. This means that it faces high corporate taxation making income inequality a major political problem. In case of political instability in countries such as China, Apple Inc. could find it expensive finding alternatives (Ratchet, 2014). Additionally, since Apple has a dominant position in music or other fields, there could be antitrust issues and political pressure to limit the market share or to break the company.
Apple products have always been known for quality and design. Since the purchasing power of clients has gone up, people are willing to buy luxury products such as iPads, iPhones, and iPods with the latest technology. Since apple defines modern lifestyle, it gains a lot from music through the application of iTunes. Economic factors either in United States of America or countries where Apple products are manufactured such as China could negatively affect sales. If labour costs in China increase, the price of products could also increase (Ratchet, 2014). Exchange rates can increase if the U.S dollar has a high value making it expensive for the company to operate in other countries in Europe or Asia.
Apple makes huge sales due to its high technology and innovative products. The company invests a lot in making developments and research enabling it to remain innovative. Apple competitors such as Samsung and Google duplicate most Apple products due to technological advancements (Ratchet, 2014). Most of Apple’s signature products and service are not unique anymore because competitors are fond of duplicating them. Cyber criminals have growing capabilities, which makes Apple have systems that are less secure thus reducing the company’s competitive advantage.
Apple being a big company runs numerous products. Some of the key competitors of Apple Inc. include Nokia, Google, Samsung, and Nokia. Such competitors have duplicated most of Apple’s products thus reducing the total sales made annually. Additionally, competitors end up acquiring some of Apple’s consumers in various regions. Prices of Apple products could also be reduced to gain a competitive advantage thus reducing profitability.
To reduce the effect of such major external factors, Apple Company should improve on advertising their products. To increase sales and to increase the number of individuals aware of their products, the company should increase its use of Face book and Google. Positive reviews made on social media encourage people to buy their products to have the same experience (Boone & Kurtz, 2013). Increased advertising will allow people to understand their products thus leading to increased sales and consumers’ loyalty.
Apple Company should continue emphasizing on the quality of their products rather than price wars. Focusing on the quality of their products will enable the company to find innovative ways of improving their commodities. The company may also discover how to cope up with the constantly changing technology. They may also come up with new designs and technology that may be quite challenging for competitors to duplicate thus giving it a competitive advantage (Hollensen, 2015).
To reduce or eliminate major political challenges affecting their manufacturing process, the company should reduce the bargaining power of their competitors. The company should search for a wide range of new suppliers to encourage competition among themselves (Kotler, 2012). Doing so, will enable the company to operate in other countries which may be more politically stable than the ones it works with currently.
When several companies enter the market, a company decreases its market share. Apple should maintain its market share and increase the profits earned through differentiating its products and the entire brand. According to Kotler (2012), it should also make its marketing strategies strong through gaining a competitive advantage over the rest. Doing so will make new entrants find it quite challenging to compete with apple due to its innovations, strong brand image, and good customer service.
Apple Company show also creates value through cost leadership and maintaining focus. Apple Inc. outsources its production to reduce the cost of production through economies of scale. It is important to note that Apple Company focuses on the industrial design and user interface to make their products highly innovative, stylish, and user-friendly (Boone & Kurtz, 2013). The company should continue improving the quality of their products by investing in innovations. Doing so will enable the company to compete favourably.
Task 4
Effects of changes of External environment on Apple Inc.’s Marketing Strategy
Apple Company faces stiff competition from rival companies producing similar products. Increased competition has led to reduced growth of sales from 50% to 9 % in America and from 94% to 27% in Japan (Apple, 2017). The Smartphone market of the company has also reduced significantly in most regions. The growth of iPad market has also slowed down with time. Apple Inc. continues to make its products user friendly and easy to use. Most consumers in United States prefer using Apple devices due to such features. Apple is expected to increase differentiation of their products. Such a strategy gives consumers a wide variety to choose from thus maintaining their loyal customers (Foxall, 2014). Apple also is likely to increase its distribution channels to other regions. They could increase direct outlets or expand their market through Amazon. Through the use of Amazon and other sites the company will be able to strategically position the products it offers. The company also will increase investments in software, computers, and mobile devices (Apple, 2017). The marketing strategies applied in this situation will increase consumer demands thus significantly reducing competition.
Apple Company faces low threats of new entrants in its area of specialization. However, there is increased technological advancement and globalization which affects the company negatively. Apple will continue focusing on its niche market which includes high income consumers making it difficult for new companies to compete with it. Apple may use the contract manufacturing strategy thus saving unnecessary expenses and costs. The company will thus find no need to invest money on social responsibilities that might cut their profits. To avoid high risks of duplication of their products due to advanced technology among its rivals, the company may patent their products and sue competitors in case of copyright issues. This strategy will enable the company to retain its technological know-how and to maintain high profitability (Wilson & Gilligan, 2012). Apple products have several substitutes produced by other companies, however, none of the competitors has produced better quality than Apple Inc. Other unique services offered by Apple include iClouds and iTunes (Apple, 2017). Apple is likely to continue inventing new products so that it may remain relevant in the market.
To ensure that the company remains accountable to the changes made, it has to reduce the bargaining power of its suppliers (Kotler, 2012). The company will continue diversifying its suppliers so that none of them will have a large bargaining power that may influence the operations of the company. The organisation remains accountable of its operations because it is able to determine which suppliers it will work with and the type of products offered. Doing so will enable the company to have diversified suppliers that offer them a variety. It will also be able to identify other politically stable regions thus increasing the organizational accountability.
Apple is well known for offering high quality products and being an innovator. The company is also able to switch customers from consumers towards itself. Customer satisfaction is one of the goals of the company (Wilson & Gilligan, 2012). It aims at ensuring that individuals live an improved personal life. The company will probably continue paying attention to details and investing in innovations to improve customer service. Continued differentiation in Apple will reduce the level of competition because other brands may find it expensive or may lack the knowledge of producing similar products.
After diversifying its products, Apple Company is able to enjoy huge sales in various parts of the world. Due to the huge profits earned, the company’s management wisely manages its resources since it has a $416.62 billion worth of total capital (Apple, 2017). Analysis of the company’s strength shows that it is endorsed by large brands due to its innovations and creativity. The company also having accumulated a large capital can benefit from highly skilled and knowledgeable personnel who will impact the company through new innovations (Ratchet, 2014). The company having a wide range of suppliers means that it has the ability to get high quality raw materials in good business terms due to high competition among the suppliers.
The company can also take advantage of smart marketing to attract consumers who have been frustrated by other brands. Through product differentiation, the company may use its large capital base to add value to their products thus attracting more consumers. Since the company started, it has maintained a culture of high quality products that are highly priced (Ratchet, 2014). Due to product differentiation and its high tech products, it can still maintain its customers despite facing stiff competition resulting from technological advancements.
Due to increased competition, other companies produce similar products such as computers, smart phones, and tablets produced by Apple Inc. Due to such competition the company may find it quite challenging ensuring that there is consistency in its products. Coming up with new innovations is quite expensive and challenging too (Ratchet, 2014). Premium pricing May not go well with the stiff competition the company faces (Kotler, 2012). This is because most companies are producing high quality products similar to those that Apple provides. Price sensitive customers will prefer going for cheaper products.
Conclusion
The marketing strategies of companies constantly evolve to adapt to the dynamic market conditions. Organisations should ensure that the outcomes and strategies of their operations are constantly evaluated and reviewed. The judgments made should then be applied to the decision making process. However, as strategies change, organisations should continue focusing on provision of high quality services, improving customer service, and acquiring highly knowledgeable staff. To develop an effective marketing process, an organisation should identify its mission, analyze its current situation, set its objectives, come up with a good marketing strategy, and evaluate the entire process and outcomes.
Business should also conduct a SWOT analysis to determine their strengths, weaknesses, opportunities and strengths. Such an analysis enables the organisation to develop appropriate marketing strategies.
References
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Boone, L. E., & Kurtz, D. L. (2013). Contemporary marketing. London: Cengage learning.
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Hollensen, S. (2015). Marketing management: A relationship approach. London: Pearson Education.
Kotler, P. (2012). Kotler on marketing. New York: Simon and Schuster.
Peck, H., Christopher, M., Clark, M., & Payne, A. (2013). Relationship marketing. London: Taylor & Francis.
Rachet, B. (2014). Swot Analysis of Apple Inc. Docs. School Publications.
Wilson, R. M., & Gilligan, C. (2012). Strategic marketing management. London: Routledge.
