CIM Coursebook 06/07 Strategic Marketing in practice

Examiners will be looking for tables, diagrams and key issues. Tables such as SWOT, though helpful do not show deep analytical thought. Typing should be no less than font size Candidates, when writing answers should cross reference the work to guide the Examiner to a particular table or chart or piece of analysis.

Obviously, they should only use whatever is necessary for answering the questions as set. All papers must be hole punched and include the student registration and centre number. Summary This chapter gives you an idea of the marketing skills that SMiP module aims to develop and test. It also shows that learning outcomes are more important than specific syllabus regurgitation.

In order to reach the desired outcomes, students need to be able to critically assess and absorb the key concepts in the other areas of the Professional Postgraduate Diploma, and their applications to real marketing problems. You also need to consider the context in which an organization will be operating, especially the type of company and also the environment in which it does business.

When studying previous cases students should attempt to list the key outcomes that they have achieved, together with some of the key skills that they have used in order to reach a satisfactory level of competence. Outcomes Relationship to outcomes o Identify and critically evaluate marketing issues within various environments, utilizing a wide variety of marketing techniques, concepts and models. Candidates should also be familiar with the Analysis and Evaluation module, the Strategic Marketing Decisions and the Managing Marketing Performance syllabi.

A brief overview A case study is an account of the major events taking place in a business within an industry sector over a number of years. A case usually features many of the key events in that it chronicles the events that have been dealt with and have to be dealt with by marketing managers. Issues pertaining to the competitive environment, changes in the business definition and the main areas of the served market segments have to be dealt with by marketing managers. Cases give students a chance to understand some of the problems faced by organizations and be able to analyse them in detail.

Cases allow students to utilize their understanding of key concepts. Their meaning is made clearer when applied to case studies. Analysing a case requires great powers of deduction. Facts and figures are often hidden in the different areas of the case. The conceptual tools help to probe the case and gather evidence of events.

In the real world, it is important to understand that there are no right answers. For most companies, strategic marketing management is difficult. Developing strategies is generally an uncertain game, making it more important to develop a careful diagnosis. All that managers can do is to make the best guess. As different individuals have differing ideas, case studies provide students with the opportunity to participate in class and to learn from others.

Tutors often act as facilitators in this process of enquiry and analysis. In actual businesses, this is exactly the way decisions are made. It is important therefore, that students can analyse the situation and be confident of their solutions. Analysing a case study One of the purposes of the case study is to let you analyse the situation that the company finds itself in. In doing this, you will need to apply many of the key concepts that you would have learnt in the other modules. A case study has to be read several times before a clear idea of the key issues can be established.

Eventually, based on this analysis you will make a series of decisions to take the company forward into the future. A detailed and effective analysis of a case should include the following: The key historical events that have contributed to the development of the company. A SWOT analysis and its evaluation. Product market analyses and the links to strategic marketing. Analyses of a range of issues that pertain to the particular case study.

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Often case studies are not straightforward and different types of analyses are required. These may be more contemporary in nature. Any constraints that the company faces from a resource point of view. These could be human, financial, technical or environmental. Any structural features or control systems. A list of key issues that emanate from the above. The analyses The key historical events that have contributed to the development of the company or sector Cases often contain a history of the company.

Historical analysis and charting can help in understanding product market decisions and any development and diversification decisions that have been made by the company. This type of analysis allows you to understand the macro-environment facing the industry sector that the company is immersed in.

The Porter five forces framework allows a structured analysis of the environment and the competitive pressures on companies within the industry sector. Amongst others, these could be demographic profile trends, sociological issues, branding trends in different markets or ethics and 16 Unit 2 What is meant by case study analysis? Some of the technological factors may show up the life-cycle stages and any special factors affecting the life-cycle model. Analysing each of the factors gives some idea of the opportunities and threats facing a company. This is an internal audit of the company allowing you to examine each function in which the company is currently strong or weak.

Companies could have a weakness in their branding strategies or new product development, yet may have current products which are well positioned in the market. Is a company in an overall strong position? Can it operate profitably in its current market sectors? How can the company minimize the threats to its position and expand on its opportunities?

Can the company turn its weaknesses into strengths? A good SWOT analysis helps you to understand, in a clear and succinct manner, how the company is positioned. This type of analysis will require you to be familiar with the various portfolio models such as the GE Matrix, the BCG Matrix, the Ansoff Matrix and various other relevant matrices. Below are examples of the expanded Ansoff Matrix Figure 2.

Options Product alternatives Present products Improved products New products Existing market Market penetration Product variants imitations Product line extention Expanded market Aggressive promotion Market segmentation product Vertical diversification Market development Market extension Conglomerate diversification Diversification Market segmentation Market leadership innovation Saved withdrawal; merger Maintenance of position; market penetration Expansion product differentiation Divestment Imitation; phased withdrawal Cash generation Unattractive Average Attractive New market Figure 2.

These gaps could be: Distribution gap — This gap can be reduced by expanding the coverage, intensity and exposure of distribution. Usage gap — To increase usage, a firm needs to induce current non-users to try the product and encourage current users to increase their usage.

Competitive gap — This gap can be closed by making inroads into the market position of direct competitors as well as those who market substitute products. Internationalization gap — This gap can be shortened through exporting, joint venture arrangements and strategic alliances. Communications gap — This gap can be shortened through advertising strategies, PR, or proactive use of the Web. Unit 2 What is meant by case study analysis? This analysis is based on the following: The Industry strength The strength of the industry sector in which the company operates IS 4.

The stability of the environment in which the company operates ES.

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This analysis is based on your ability to analyse key aspects of the case study, pertaining to the company. The analysis depends on answering a range of questions and then taking an average. Step one analyses each aspect as shown above. Critical factors and your assessment of this area of the organization 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 High High High Low Strong Easy High High 19 Unit 2 What is meant by case study analysis?

This can be easily obtained by adding CA and IS you will either get a negative point or a positive point and adding FS and ES you will either get a negative point or a positive point. These two points will then determine the overall quadrant in which the company will fall. The implications for falling within particular sectors are these: Like any other real-life analysis you may also have to make certain assumptions.

For all the examples it is assumed that the company positions are in the middle of each quadrant. Aggressive posture — In this quadrant, a company is set within an attractive industry which faces little environmental turbulence. The company enjoys a good competitive advantage which it can protect with good financial strength. As this sector is attractive, it is likely to attract new entrants. The company needs to protect its position through acquisitions, by increasing market share or by extending its lead in specific products and services in which it is the market leader.

Companies in this sector have the potential to be cost leaders if they are in an FMCG market. Competitive posture — In this quadrant, the industry is attractive and the company enjoys competitive advantage within a turbulent environment. The company needs to acquire financial strength. It needs to do this in order to improve its marketing and improve its product lines. It may also need to reduce costs and protect competitive advantage in a declining market. In such a quadrant, a company may need to look for cash resources either through merger or through being acquired.

Companies in this area need to differentiate their product offerings and utilize their marketing skills as much as possible. Conservative posture — If a company is positioned within this quadrant, it has a focus on financial stability within a stable market. The chances are that the growth is fairly low.

Under such circumstances, a company will need to become competitive in its product or service offering. It may also need to consider investing its cash in entering new attractive markets or offering new competitive products. It may also need to consider pruning its product lines. Companies located in this sector would benefit from a more focused product or service. They may be able to do well in niche markets, organized along geographic lines, product lines or along buyer groups. Defensive posture — A company set within this quadrant lacks a competitive product or service.

It also has low financial strength and is situated in an unattractive industry sector. Competitiveness is crucial and the company will have to consider retrenchment by pruning its product lines, reducing costs dramatically, cutting capacity and slowing down on any investment.

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Companies located within this sector are often ripe for turnaround strategies. They can also be relatively defenceless, making them easy targets for takeovers. It is important to realize that the SPACE analysis should be used judiciously as it may only be appropriate for many private sector companies. It may be inappropriate for public sector or non-profit sector analysis.

Parts of the analysis could be modified for use in different sectors. This, however, will need sound knowledge, creativity and an ability to sensibly translate the basic premise of SPACE to a new sector. Any constraints that the company faces from a resource point of view Companies face a variety of constraints when developing their strategies.

These constraints could be market constraints size and growth potential of a market , financial constraints the ability to finance marketing campaigns, foster new product development, cash flow, ability to raise money, etc.

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Any structural features or control systems Analyses should include an understanding of the present structural pattern of the organization and the way in which this contributes to or detracts from developing its marketing strategies. For instance, is there a defined marketing structure? Are there systems for monitoring marketing effectiveness or orientation? Are the systems rigid or flexible? Key issues As a result of these analyses, you should be able to list a number of key issues which are facing the company described in the case study. These key issues form a valuable resource when answering the questions set in the examination.

These type of analyses can then be linked to any strategic plan that you may have considered developing. A generalized approach to formulating strategies would probably contain the following: Statement of the problem — This will contain a situation analysis of the company, its problem areas and its general capability. Analysis of data a Industry — This would cover an analysis of the growth potential, SWOT, market structure and competitive pressures. Also, issues such as mission, values and objectives should be taken into account. Recommendations Decisions and strategies — This should be the crucial element of the plan, encompassing key decisions that may be taken, giving reasons for choosing these, understanding the possible reactions to these by competitors and the justifications for these.

Resource implications also need to be considered. Clear and decisive objectives must be set. Implementation, contingency and control — This section should look at how easily the recommendations could be adopted, taking into account resource allocation, cost implications, budgets and timetables.

This section should also envisage contingency requirements in case of difficulties regarding implementation strategies. When considering implementation, it is also important to develop monitoring systems for ascertaining the success of the recommended strategy. IT operates in the B2B market and has built a strong client base in this area. World Class International Holdings Ltd. World Class International Consulting Ltd. World Class International Technology Ltd.

These operate cohesively and provide a seamless comprehensive service to clients. This is shown in Figure 2. General services such as finance, marketing, communications, HR and sales are provided centrally to the two key operating units. It soon became a dominant player in the education market, in the South of England by providing Administrative Schools networks. This was extended to curriculum development through a product called Classlink.

The Intellectual Property rights for this software were eventually sold to Viglen PLC, which continued to develop and refine this award winning school software. In , 2GL Healthcare was formed as a subsidiary in order to enable staff from former health authorities to continue their relationship with the National Health Service by providing IT infrastructure and tailored software solutions. Initially Ashton Tate products were being used, but then a strong relationship began developing with Microsoft.

These relationships are shown in Figure 2. It combines expertise in process design, Internet technology and managed service capabilities. It enables them to look at new channels to market and the impact on their businesses through leveraging new technology. This type of strategic development focus may lead to: The market growth in this area is high and the company has a low market share.

This experience allows products to be ordered online and delivered efficiently and speedily utilizing integrated processes. The company has a low market share in a high growth area. The company has a good market share in a low growth area. This helps to manage and get closer to real demand for products and services. In this high growth area, the company has a low market share. About 80 per cent of drugs fail to get through clinical trials.

These facts demonstrate the need for complex and sophisticated information systems within the Biotechnology and Pharmaceutical sectors. This is a high growth area with the company having a low market share. Solutions often require a complex design in order to incorporate issues of security, non-repudiation, scalability and application integration.

In order to improve implementation of infrastructures, WCI provides both support and training. A 24 hour, 7-day support service and accredited training facilities are also available. This is a low growth area with the company taking a good share of the market. These can vary from isolated services to complete IT operations, enabling clients to concentrate on their core business.

This is a high growth market area with the company taking a reasonable slice of the market. Smith and Hutchison 3G. WCI can offer cost effectiveness due to economies of scale and the increased process expertise on offer. Example analysis of the mini-case Key issues With the recent merger, the company has to establish a clear brand image. Moving steadily towards m-commerce platforms. The company needs to develop the outsourcing market substantially. The company is essentially an SME and it needs to grow to a reasonable size to challenge its main competitors.

The nature of the IT service market is constantly changing. Challenges are being posed by the growth of e-commerce and m-commerce. The company is heavily dependent on the pharmaceutical sector. Companies are getting more sophisticated in their needs, demanding more value added services. The company needs to globalize as quickly as its clients globalize. In terms of the client connection, the key points to consider are: Addressing the needs of different customers sensibly. A well configured company has a seamless interaction with its clients. A configuration needs to be aligned according to metrics measuring effectiveness , incentives and structures.

Utilizing the Internet effectively within the organization. Customer-service connections and measurement of success. CRM is not just about databases, but about a complete reorientation towards the customer. Potential strategies emanating from Portfolio Analysis o Building relationships with clients where the businesses are classified in the Question Marks section as High Growth but Low Market Share. There is potential to gain share through repeat orders and market development. New and old clients need to be nurtured.

The analyses shown above indicate the way in which new case studies could be analysed for the purpose of the examination. It is important to consider what you wish to concentrate on and the angle that you wish to take. The examiners find that most students are quite innovative and creative in the way they undertake case study analysis. Some aspects of financial analysis may well be generic and mathematical calculations such as ratios are not likely to vary from one analysis to another.

Summary When evaluating a case, it is important to be systematic. Analyse the case in a logical fashion, beginning with the identification of operating and financial strengths and weaknesses and environmental opportunities and threats. If they do not, then what changes need to be made? What are your recommendations? It is also important that you consider the strategic options that may be available to the organization. Some of the options may not be feasible, suitable or acceptable in the light of the points you will have covered above.

Make sure that you outline the strategies that need to be adopted to implement any recommendations that you make. Many company strategies fail as a result of poor implementation or unrealistic expectations of market growth and demand. You, therefore, have to be aware that your recommendations are sensible and fit the existing resource base and capability of the firm.

Remember that this unit only gives you an indicative and not a comprehensive range of analytical tools. You need to read widely and use other new analytical tools that may be available, including your own ideas. In the first SMiP case, candidates needed to utilize new types of analyses to bolster their arguments and examples of these are incorporated in the book.

You must also be familiar with all aspects of the syllabi in the other Professional Postgraduate Diploma modules. Further ideas are given in Unit 4. Finally, remember that for the SMiP syllabus, you have to prepare analyses before the examination as explained in Unit 1.

Introduction This outcome knits together a range of different areas of marketing. Marketing is a complex area of business and for successful implementation it is important for marketers to develop strategic direction for an organization, taking into account marketing intelligence in conjunction with company resources and processes. The importance of developing a vision is also very important when developing a strategic focus.

This helps an organization to develop a clear direction. Business Intelligence The development and organization of Marketing Intelligence Systems has always been an important aspect of marketing. Market Intelligence can be gathered in several ways. Companies can gather information from secondary sources and reports produced by companies such as Mintel and AC Neilson or commission primary research. In , Titan was regarded as the most admired consumer goods company in a survey carried out by Advertising Marketing in India. Advertising, Marketing, e-commerce, India Table 3.

The surveys were carried out exclusively among professional marketers in companies marketing FMCG and durables. Respondents were drawn from all levels and conducted in the major cities of Delhi, Calcutta, Chennai and Bangalore. The company received top positions when the following questions were asked: Products are designed to meet customer needs 7. Products are different from competitors 7. Better than average at new product launches 7. Brands provide long-term stability 7. Products are market leaders 7. Products are innovative number 2 slot 7. Products are consistently superior to competitors 7.

Products offer value for money 7. Company keeps in touch with market constantly 7. Company has a superior distribution network 7. Provides good after-sales service number 2 slot 7. As can be seen, Titan retained its leadership position. Working in its favour was its product launches into new segments, including the Dash! A consumer brand is much more than a bundle of tangible and intangible benefits. For this particular survey, seven attributes were considered: The quality of the brand Value for money The future of the brand Distinctiveness Uniqueness The feelings that the brand evokes amongst the consumer How inclined the consumers were to purchase the brand.

In general, the brands are less well known in rural India. A ten-point scale was applied and a total of interviews were conducted, in the following locations: The brand received such success because it appeals to the youth segment and is aspirational. Titan, in India, is also known for its classy elegance, while being a popular mass-market brand with a strong presence at the lower end.

It is a brand that is also equally popular with both men and women. The company is consistent in its brand expenditure and spends, on average, around Rs. Although this is small compared to others within the top 10, the amount spent appears to be highly effective. Economic Times, India The above excerpt shows the usefulness of primary research carried out by various agencies to Titan. The company could also carry out its own primary research by commissioning agencies to carry out work on customer satisfaction or design of the watches.

Primary research Good market research provides a good foundation in formulating successful marketing strategy. Conducted carefully, qualitative primary market research studies can yield insights on issues such as product usage patterns, unmet needs, product positioning, and pricing — all of which are central to strategy formulation and decision-making. Effective qualitative primary market research The effectiveness of qualitative primary market research depends on how it is carried out and it can be improved by concentrating on the following issues: Focus on strategic marketing decisions All aspects of the research study, from questionnaire design to recruitment and analysis, should fit together and be focused clearly on developing information, insights and understanding for strategic decision-making.

Quality of respondents Data collected in any primary research is only as good as the respondents interviewed. In this respect, respondents should be identified and screened carefully to ensure that each interview increases confidence in the findings. It may be advisable to conduct both quantitative and qualitative research so that each area 34 Unit 3 Understanding the direction and management of marketing activities complements the other.

This is illustrated in Figure 3. This research is necessary to understand the market potential of products and services. Market Research in conjunction with market intelligence helps an organization to develop effective marketing strategies. Success depends on information about a particular market segment, a geographic area or customer preferences, enabling better targeting.

Mini-case Marketing campaigns impact on consumer habits Andy Farquarson looks at the way partnerships between business and charities leave their mark on the consumer. Cause-related marketing campaigns are having a significant impact on consumer habits and are bringing benefits to both businesses and the charities they link up with, according to new research. This latest study looks for the first time at how people respond to such campaigns — rather than how they think they would.

Almost 90 per cent of those surveyed had heard of at least one cause-related programme and almost half could spontaneously name a specific company or brand involved in a campaign. Two in three people believed more businesses should get involved. Against this, however, a small percentage felt cause related marketing was exploitative, or that it was inappropriate for business to become involved in social issues.

More than 65 per cent of respondents said they had participated in a cause-related marketing campaign. Of them, three-quarters had either switched brand, tried out a product or increased their usage; and four in five had felt more positive about certain purchases, more loyal to a company or brand, and more inclined to look out for further cause related campaigns. Although 30 per cent of respondents were regular Internet users, comparatively few had found cause-related marketing campaigns on the web.

Old media predominated, with awareness of campaigns garnered through in-store promotion 23 per cent , television commercials 18 per cent and advertisements in print media 11 per cent. Cause-related marketing is defined as any partnership between a business and charity which markets an image, product or service for mutual benefit. Any business which tries to project this sort of campaign as strings-free giving is heading for a fall; the public is not gullible. Unless campaigns are properly managed, and based on integrity and transparency, they can be counter-productive.

Among a wide variety of factors cited by those surveyed were schemes that supported local community activity, a high level of donation or support for the project or charity and clearly communicated, unambiguous benefits. So it is hardly surprising that advertising agencies are establishing specialist teams to provide cause-related marketing expertise to their clients. That would help charities gain long-term funding and exploit the expertise of the communications profession to promote their missions and messages.

Further information at www. The Guardian, Wednesday, 15 November Secondary research This type of research is based on information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations and other organizations. This includes Census Bureau information and Nielsen ratings. Such information is now readily available through the World Wide Web. In some instances, detailed reports are produced for industry sectors by major agencies such as the Gartner group. However, these are quite expensive to purchase. For instance, secondary research may help a shoe manufacturer to understand the number of shoes sold within a country.

However, pricing data, the impact of shoe design or how well the brand is accepted, may not be available. This is where primary research can be used to obtain more specific information. Organizations rely on information systems and this aspect is summarized in Figure 3. An organization, as it develops and grows has much historical information that it can draw from its archives.

Often interesting information lies hidden until it is analysed. Market Intelligence is drawn from company sources, customers, salesforce, secondary information, commissioned research and the Internet. All the information has to be drawn together to form a Marketing Decision Support System.

There is little in marketing that does not incorporate information technology. Market intelligence can therefore be gathered in many ways Ranchhod, This information can be used for enhancing CRM and logistics. This means that they can place orders and specify delivery times. This can be done via links to an intranet or the Internet. Well-organized companies can gather and store this information. This is already a reality with consumers being able to buy soft drinks, chocolates and car washes via mobile devices.

Data on consumption patterns can be stored. This will also allow customers to undertake transactions with shops and restaurants. This also has implications for advertising and branding. The marketing function, often, does not understand what happens in IT with regards to service provision and prices. There is often a cultural gap between marketing and IT and therefore there is a need to integrate data and for computer experts to work side by side with marketers.

There is a need to share experiences. The enterprise can then have a unified view of a single customer across the entire enterprise, linking other functional and geographical units together. In the end, the way the relationship is maintained, grown and nurtured means that a customer is less likely to invest time in building such a relationship with a competitor. This needs relationship building needs to be regarded as a business process rather than a technology suite.

The technology needs to be able to support and enable this process. With the growth of the Internet fuelling online purchases, websites are now very sophisticated and techniques for advertising are now increasingly becoming technologically based. For instance AdSense, which allows businesses with websites to run key word text or image advertisements through a system managed by Google. This allows companies to position themselves cleverly on the search engine, enabling customers to locate them easily.

Of course, it also generates massive revenues for Google. An organization can be adaptive to its environment, thereby learning from the subtle changes taking place in the marketplace. Authors such as Senge view a learning organization as a continuously creative, innovative organization, where each member is an active participant within the learning process.

This allows for continuous learning and flexibility. Learning is often constrained single-loop learning at a low level or it is of a higher, creative order where cognitive learning takes place double-loop learning. Single-loop learning It is easy for organizations to be conditioned by single-loop learning. In many instances, companies have to adjust to specific demands in the market and often they will have welldeveloped strategies to cope with this.

Single-loop learning is also prevalent within functional areas of businesses as bureaucratic systems are in place to deal with orders and demands. These are routine patterns and are triggered by particular stimuli within the environment. The marketing function in a chocolate company, for instance, will respond to low demand by spending more on advertising. In general short-term tactical issues are dealt with efficiently.

This is not unusual or undesirable. In many instances, companies serve particular markets and they have to focus on these markets to deal with them efficiently and to give customers satisfaction. This efficiency in the marketplace can create rigid adherence to organized approaches and leave little to the imagination. The way in which the business is conceptualized guides core capabilities. This leaves little room for imagination and for any moves towards more interesting and potentially lucrative areas of business. It entails a deeper challenge to routine practices and rules. This type of generative learning shows a willingness to question long-held assumptions about mission, customers, capabilities or strategy.

Often this is based on systems thinking and works through existing relationships, linking key issues and events. Higher-level learning usually occurs during some types of crisis, for example: It corresponds to the development of a new frame of reference s. The record industry, for instance, was essentially stuck in its old paradigm of selling records or CDs through retailers.

It generally failed to grasp the opportunities offered by the new medium. Records and movies are at the end of the day essentially bits of information. The Internet made it possible to transmit this information globally. Individuals began to freely exchange information and music. Although illegal, this still occurs regularly and vast amounts of pirated music changes hands on a daily basis.

Artists now have their own websites and in some instances are distributing music through these sites. No sensible Internet strategies were therefore developed. This has led to much heartache and refocusing within the sector.

CIM Coursebook 06/07 Strategic Marketing in practice - Ashok Ranchhod, Ebi Marandi - Google Книги

Music can now be stored on CDs, mobiles, Mpeg players, memory sticks and computer hard disks, making the one-dimensional approach to music sales obsolete. The same is true for television programmes and films. A true learning organization, therefore will, place great value on information transmission contributing to general learning. This will depend on the following: Information distribution — Distributing information and knowledge throughout the organization. Information interpretation — Understanding the information and interpreting it so that sensible opinions can be formed.

Difficulties Accelerated changes in the complexity of markets. Internal focus External focus Exponential growth in the volume of market data Shared organizational assumptions coherence timeliness Diffusion of knowledge in the organization Leading to: Anticipation rather than reaction Observation of others Understanding observables Creating stages of knowledge development Figure 3. Pearce and David suggested that a mission statement should contain the following aspects: Each of these points covers aspects of the organization where information and learning are important. A broad encompassing statement can, therefore, be quite helpful to an organization.

Some examples of Mission statements: The Co-operative Bank have this as their ecological statement: However, we undertake to continually assess all our activities and implement a programme of ecological improvement based on the pursuit of the following scientific principles: The productive area of Nature must not be diminished in quality diversity or quantity volume and must be enabled to grow. Unit 3 Understanding the direction and management of marketing activities Society must utilize energy and resources in a sustainable, equitable and efficient manner. We consider that the pursuit of these principles constitutes a path of ecological excellence and will secure future prosperity for society by sustainable economic activity.

The Co-operative Bank will not only pursue the above path itself, but endeavour to help and encourage all its partners to do likewise. From the Unilever company report we have this statement: He introduced such pioneering initiatives as a shorter working week, sickness benefits, holiday pay and pensions.

He felt so strongly about broadening the experience of his employees that he regularly took them all to London for the day to see exhibitions and even built them an art gallery. William Lever was living at a time when the fabric of society and the forces in society were very different from today. He had clear moral views and believed he had a moral responsibility to help, both through business and his personal actions.

Indeed his very visionary mission statement was itself an expression of his values: Each of the above examples are very good examples of mission statements where Corporate Social Responsibility is taken into account. Mission statements can be quite varied and address different issue. Often all the issues discussed by Pearce and Webb are rarely addressed. The internationalization process of firms The SMiP paper is frequently international in nature and the candidates need to be conversant with international constraints under which marketing managers operate.

This section provides the reader with a reminder of some of the relevant issues. Trade has been taking place between nations for dozens of centuries and is not a new phenomenon. The volume of international trade however is increasing rapidly with the membership of the World Trade Organisation and various trading blocs expanding and the tariff and non-tariff trade barriers being dismantled or reduced periodically. The European Union, for example, is now a reality for European firms enabling them to compete freely in a market of hundreds of millions of consumers.

This is set to increase as the new members take up their seats and full membership status within the Union.

CIM Coursebook 06/07 Strategic Marketing in practice (Electronic book text)

Indeed there are various reasons for which companies, particularly SMEs, may engage in international marketing, for example to off load excess production at home, to find new markets for products which have reached their decline stage in the domestic market, to benefit from cheaper factors of production, to remain competitive in the face of foreign competition in their domestic markets and so on.

The current political and economic pressures towards trade liberalization and the consequently increasing competition from around the world has made internationalization a relevant issue for the majority of SMEs in both manufacturing and service sectors.

Several definitions of the process of internationalization exist. Most of these treat internationalization as the step by step process of business development whereby a firm increasingly commits itself to in international operations through specific products in selected markets. The decision to operate internationally is of course a strategic decision and many studies and theories attempt to explain the process of internationalization of firms. Originally based on research into US firms the suggestion is that manufacturing by the innovator was normally for the domestic market in its initial phase and then for export purposes.

This was later followed by production overseas due to growing overseas markets, increase in competition and the standardization of products. Subsequently, foreign products became competitive and imports into USA began to offer serious competition. Hence, firms relocated to developing countries from where they shipped products back to the home country. Focusing on the experiences of Swedish firms, Johanson and Wiedersheim-Paul highlighted four stages in the internationalization process, starting with exporting through independent representatives to a final phase of overseas production.

The Uppsala Internationalization Model Johanson and Vahlne, assumes a process made up of stages too. The firm begins with less risky ventures in physically close markets and gradually increases its commitment and its geographical reach through a process of experiential learning. Vatne suggested that SMEs which are engaged in manufacturing are influenced by their internal resources in terms of their business territory. They have suggested that the ability to internationalize depends on the availability of suitably educated and experienced individuals with a variety of skills who help the SME to sell specialized and innovative services internationally.

For example, the Uppsala model of internationalization process is a model that is based on the implicit assumption of incremental and continuous growth. There is however an alternative approach represented by the entrepreneurial models which are based on identifying opportunities which arise in response to external demand or the availability of new resources.

Lack of knowledge of international markets at the start of the internationalization process seems to be common to most theories. While some of these theories emphasize individual learning and improvement in management understanding of international markets as crucial in 44 Unit 3 Understanding the direction and management of marketing activities the incremental process, others recognize the importance of networks in fuelling the process, for example Johanson and Vahlne It ought to be noted that not every firm will follow an incremental process in its internationalization.

Such companies from the outset view the world as one market. These are often small technologically based firms who strive for innovations and breakthroughs. Such firms require rapid internationalization to make the most of their innovation and to gain first mover advantage. Some have suggested that bornglobal companies may be more common than it is generally assumed. Foreign market entry strategies The process of internationalization involves decision regarding foreign market entry strategies.

The mode of entry is often at least a medium term decision, if not a long term one, and has therefore strategic implications for the firm. While exporting is the first option for most firms other options, particularly as the firm grows, need to be evaluated too. Market size, in terms of current and potential value. Profitability of the target market and costs of operating in that market, including logistics, promotion and channel management.

The entry-level mode, as discussed above, is often that of exporting. In this case the firm produces domestically and sells overseas. There are two main choices for exporting.

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As an indirect exporter the firm commits few resources to international marketing and chooses the low cost option of having its products sold overseas by others on its behalf. As a direct exporter the company becomes more active in, and devoted to, marketing overseas. The company may make use of a number of different intermediaries, including agents and distributors. Direct exporting gives the firm more control over both market selection and its marketing mix, but is costlier that is more risky than indirect exporting.

A firm also has a choice of different methods of overseas production with varying degrees of involvement, control, risk profit potential. This method of entry helps avoid paying tariffs, is relatively quick, saves on market research costs and does not require much capital.

Carefully negotiated contracts are important in eliminating or reducing risk. Franchising is a form of licensing. In this case the agreement includes more than simple licensing. As with licensing this is a quick way of entering foreign markets and is potentially highly profitable with little capital investment required by the franchiser. Problems however may arise. This requires careful monitoring and training of all franchisees. An international strategic alliance and a joint venture are both collaborative arrangement between two firms, but increasingly an alliance is regarded as a non-equity based agreement while a joint venture as one that is based on equity.

Firms engage in strategic alliances share information, assets and technology. Sustainability in Fashion and Textiles. Talent Management in Emerging Markets. Supporting Small-scale Farmers and Rural Organisations: Learning from Experiences in West Africa. Global Public Procurement Theories and Practices. Harnessing the Power of Collective Learning. Food Supply Chain Management. Food and Agriculture Organization of the United Nations. From Infrastructure to Services eBook.

The Future Is Shared. Global Innovation in Emerging Economies. Working in the Global Economy. E-Agriculture and Rural Development. Benchmarking in Food and Farming. Strategic Environmental Assessment in Action. The Global Business Handbook. Managing Information and Knowledge in the Public Sector. The Sales Acceleration Formula. View from City Hall. Delivering Performance in Food Supply Chains. The Successful Sales Manager: Do the Right Thing.

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