Formulation of Strategies on Product and Promotion
Strategy formulation is the development of long-term plans necessary for the growth and development of an organization and it is based on an analysis of various factors. Strategy formulation is important as it enables an organization to run in the right direction. Among the product strategies are: product modification and other factors like economics, culture and the life cycle of a product, and the local laws.
Promotion is understood as the act of stimulating the demand for the goods and services of an organization, and it is aimed at creating awareness of a product and image establishment. Product strategy varies based on the goods and services and the target consumers. There are those products that can be sold with modification and there are those that do not require modification based on specific market requirements.
Multinational enterprises need to formulate marketing strategies before they begin investing; this is because strategies provide direction to the operations of a business. Tactical decision-making is significant in ensuring that the products meet the needs of the customers. The key issues that should be put into consideration in the formulation of product and promotion strategies are:
Target Market: identification of the target market is a key strategic factor; this is where a firm should establish the groups of consumers who will buy its product brand. The consumer groups should be identified based on the following factors: age, income, sex and characterization of their lifestyle. After identifying the target market, the relevant promotional strategies that match the target market are designed.
Product Decisions: vital product decisions have to be made especially in relation to the features of a product. This should be carried out according to the needs and preferences of the target consumers. There are many ways in which a product can be made to be unique, for instance using of unique scents is a common way that is used. Products should be manufactured in a manner that is adapted to local tastes (Rugman, Collinson & Hodgetts 2006, p. 48).
Promotion: this is instrumental in updating the consumers about the availability of certain products in the market and persuades them to buy the goods from the market. In the formulation of marketing strategies, only those techniques which are appropriate should be adopted.
An example is when a firm wants to build a promotional strategy that targets children, an advertisement on cartoon TV shows is an effective one but any strategy that is aimed at stimulating trial of a new-product brand on the market, sales promotions support like giveaways and coupons will be appropriate (Handlin 2012, p. 1).
Economic Issues: this is considered an international strategy that is based on cost leadership, and product differentiation and segmentation. This strategy is utilized in the case where a product is generic and cannot be sold on any brand name or support service.
Political Strategies: this strategy is a country responsive and is mainly aimed at protecting the local market niches. Various Multinational Corporations (MNCs) utilize country-cantered or multi-domestic strategy. In this aspect, the success of a product is highly dependent on marketing, sales or services.
Industry and Competition: this is a fundamental component that is required for the formulation of strategy. Knowledge about the environment is necessary for the development of strategy since it will enable the firm to build a competitive advantage over the market.
Monitoring of Demand and Supply Related Factors: this is a key issue in the formation of product and promotion strategy. It is necessary for a firm to place into consideration the pattern of consumption, buying habits and the market growth potential. Supply-related factors shape the competition within the industry (Thenmozhi n.d., p. 6).
By analyzing the above strategies, a firm will be in a position to choose the mode of exporting most appropriate for its case. It will also guide its business in the regions, and the products that it should specialize on. The effect of export on the above issues can be explained using the international trade theory where a firm exports only those goods that it produces favourably. This will enhance a firm’s competitiveness and international abilities (Rugman, Collinson & Hodgetts, 2006 p. 78).
Supply and Chain Performance Efficiency and Effectiveness
Supply chain is understood as a network that includes all the agents who handle the products from supplying the raw materials to the final production of goods. Each of the players in the supply chain plays a special role which is of significance to the final product. These players need to be coordinated to create an effective supply chain system.
If a supply chain is not well coordinated, its running will face many challenges and consequently this will affect the quality of goods produced. Uncoordinated system of supply chain results in inefficiencies. There is a need therefore to manage a supply chain in order to enhance its performance and efficiency. The key approaches in managing a supply chain to improve effectiveness are:
Bullwhip Effect: This is a problem that is common in unmanaged supply chain networks, and it is an oscillation in the supply chain which is as a result of demand variability. This should be addressed to prevent high costs and poor services (Rugman, Collinson & Hodgetts 2006, p. 137).
Vendor Managed Inventory: this is an effective way of enhancing supply chain, and it involves the vendor finding out the volume required by the downstream agents to avoid disruption of the supply chain activities.
Various companies have opted for vertically integrated model of a supply chain to enable it make its products as cost-effective as possible and to make their supply chain to be superior in strategy and performance. Various companies have realized that having an effective supply chain is necessary for global competitiveness and hence various companies have adopted various other approaches like just-in-time, lean and agile manufacturing to make their supply-chain effective.
The efficiency of a supply chain is determined by the following stakeholders: customers, employees and suppliers (Kersten & Mansi 2009, p.104). The effectiveness and efficiency of a supply chain can be realized through the integration of all the systems, functions and activities in the whole chain. This is based on systems approach that involves the management of information flow as well as the flow of raw materials and services (Flynn, Morita & Machuca 2011, p. 136).
Promotional Mix in Marketing Products
Promotion can be viewed as the creation of demand for a product in customers through various means. Multinational enterprises use sales promotion to enhancing the demand for their products in many regions that they operate in. Promotional mix is determined by the nature of a product and the target market, and it is considered a part of the marketing mix. Promotional mix can be divided into four parts namely: advertisement, personal selling, publicity and sales promotion.
In analyzing a promotion mix, it is imperative to understand how a company communicates with its potential stakeholders and the four elements of the promotional mix can help in improving the image of the product and company, and it also affects the consumer buying attitude. An effective marketing is sustained by a combination of well calculated moves and decisions; cooperation of all the players in the supply chain is vital in enhancing the effectiveness of supply chain performance.
It is imperative that individual promotional mix should be designed to match certain individual markets; advertisement is, for example, complex and inappropriate for international markets due to variations in language and culture. Modification of the promotional mix is aimed at matching the objectives within an organization with individual promotional mediums and to enable a firm to identify the most appropriate and persuasive promotional strategies.
The modification of a promotional mix by multinational enterprises is necessary in order to sustain market variability and to enable them appeal to new markets for existing products and the target market while minimizing promotional waste.
Promotion mix has been considered an integral part of the total marketing strategy, and it is expensive for many companies since it dominates their budgets, but it is critical in reaching their markets together with the product, price and distribution. Modification of a promotional mix is aimed at matching the brand goals with the marketing objectives of a company and to enable a company to maximize persuasive promotional strategies
References
Flynn, B, Morita, M & Machuca, J 2011, Managing global supply chain relationships: operations, strategies and practices, Hershey Pa, New York.
Handlin, A 2012, Marketing Strategy Formulation, ehow. Web.
Kersten, W & Mansi, A 2009, Supply chain performance management: current approaches, Erich Schmidt, Berlin.
Rugman, A, Collinson, S & Hodgetts, R 2006, International business (4th ed), Prentice Hall, New York.
Thenmozhi, M n.d., Strategy Formulation: An Overview, National Programme on Technology Enhanced Learning. Web.