A strategic marketing planning framework
Strategic marketing planning framework is based on the belief that customers should enjoy products and services offered by companies. To get full benefits of these products and services, the respective providers need to offer them at an appropriate time and place. In some instances, consumers may be privileged to get custom-made products. The value addition delivery means the company will rely on its internal resources to create what its clients really need and desire to have.
The pricing aspect of marketing should take care of actual value that can be considered fair if mass market is the target (Kotler & Armstrong, 2001). It may sound quite simple in theoretical perspective, since all that is required is to create a product that is needed by a particular group of people, put it at the right place regularly frequented by these people, and finally offering the right price that would make them purchase the product with little strain.
According to this framework, there are several aspects of marketing needed to solve marketing puzzle within the practical sense. The first requirement is to find out what these customers want in terms of product quality, quantity, placement, and pricing.
Value Creation
There are two main reasons for adding value to product and services: to benefit customers, and to build business domain. These can be achieved through formation of partnership with other firms, whose roles ensure business objectives and goals are reached.
It must be noted that the ability to develop products that appropriately suit customers depends on the firm’s ability to afford the necessary resources. These resources will not only aid the production process but will also help in the distribution process, where the products are expected to reach the target customer at the right place and time. For example, a producer of FMCG in the present business environment will need to use faster means of communication to reach its target market so as to ensure profitable and faster sales. Some of the value creation will mean adding internet marketing as part of marketing process.
The other important part needed for successful marketing is to create partnership as illustrated in diagram 2. In this aspect, it is critical to note that many businesses would find it absolutely difficult to go into partnership with other businesses because of the difference in their divergent needs. Moreover, a firm can only benefit from business partnership if it is able to stand out among its partners as offering the best deal in a particular area of specialization (Hunt, 2002). According to Hunt (2002), the first step in developing an effective joint marketing strategy is to find out what the other firm need to effectively form marketing strategies. Basically, this would still need assessment of a firm’s internal resources to ensure it has the capacity to develop and offer the needed part for marketing.
Marketing and customer focus
It is noted that the most important aspect of marketing is focusing on the customers’ needs. This call for a clear and concise cognitive space to ensure the necessary actions is taken care of in the process of marketing. Once the position of the customer has been established, it is important to make them have the benefits they would need to get attracted to in terms of product and services.
How and why the details of this strategic marketing process may differ in the international context
Globalization has compelled many firms to go international in their marketing endeavours. This is because international market has presented a significant avenue for the companies to expand their market reach as well as increase profitability. However, it is noted that increased complexity of the international market makes the whole marketing aspect seems like a puzzle. This is because penetrating the global market depends on more that just customer focus.
National wealth in the economically heterogeneous world market and cultural factors determine the economic viability of the marketing strategies that a company would deploy (Hunt, 2002). Secondly, in some fields, the global market is somewhat saturated, creating a form of cut-throat competition within the business environment. In essence, international market’s complexity is compounded by the need to navigate varied socio-political and economic situation in various target countries (Joshi, 2005).
PESTEL analysis
While the strategic marketing planning framework mainly concentrates on the customer, company and collaborator analyses, international market demands for more than just these aspects. It must be recognized that effectiveness of international marketing will require appropriate environment represented by stable political, economic and social structure of the state.
Political environment
Successful marketing strategy in the international arena demands that political environment be favourable. Such factors as the level of government intervention, i.e. the government dictating what goods and services the government wants produced, the level of subsidies the government are willing to offer and political decisions play key roles to marketing initiatives.
Additionally, how a country takes care of its citizens will determine the health of the workforce and education, consumers’ ability to purchase (Mooij, 2010). Stable political environment will also determine the level of infrastructure development such as road networks, rail transport system, and air transport. The marketing framework highlighted above does not explore these aspects, a scenario likely to create difficulty in penetrating the international market.
Economic Environment
Some of the most common aspects of economic environment are based on tax and other charges, economic status of a state, exchange rates, and inflation rates. These factors will determine success or failure of any marketing strategies employed by a company. For example, higher interest rates in a country may interfere with the marketing initiatives as firms would be pressured to cut on the marketing budget, making it quite challenging to balance its production output and input.
A country with a strong currency will make it difficult to export the products as their prices are likely to shoot up beyond the reach of the citizens of countries with weaker currencies (Mooij, 2010). Increased inflation is likely to make “employees to demand for higher wages, hence raises the cost of production” (Mooij, 2010, p.6). On the positive note, a country that faces economic growth and a boosted GDP is likely to generate increased demand for products and services.
Social environment as a factor
The social transformation in a state may also change what people wants and are willing to consume (Travis, 2007). For instance, United Kingdom has experienced some social changes in the recent past as majority of its population ages, thus increasing the cost of firms that have committed to pension schemes to its employees (Travis, 2007). All these factors are likely to impact on the budget for production and marketing initiatives of a firm in the international level.
Technological factors
The emergence of new technology may make the above marketing framework inapplicable. If a firm is not able to adapt to the new technological changes in the modern market, it is not possible for such a firm to build any substantial marketing initiative. However, this marketing framework calls for strengthening of a firm’s internal resources, which may include technological changes and management supporting the marketing initiatives.
Environmental Factors
For a firm to effectively manage its marketing process, several environmental factors are tipped to play a role in the process. Such factors as weather and climate are critical and they will determine what is to be consumed by the masses. For instance, temperature changes are likely to affect tourism and agriculture among many other sectors (Travis, 2007). This marketing framework is not able to control these environmental factors that are likely to impact on the marketing initiatives.
There is also increased desire by global community to preserve environment, hence the increased call for firms to increase sustainable production and marketing in their strategic approach to business. This will also help them comply with the need to build more customers through satisfying their desires.
Legal Factors
The law of the country will define what issues a firm will take into consideration before engaging in business. If marketing initiatives are considered discriminatory in a certain country, the overall impact would be that the firm would face serious legal implications if it carries out such initiatives. For example, United Kingdom recently introduced the discrimination and disability act that limits firms’ initiatives to develop marketing initiatives likely to infringe on the marketing process (Travis, 2007). The changes in legal setting may change the costs of marketing operations in a firm’s initiatives.
Effective marketing communication
Standardization and market fragmentation are the two main strategies to penetrate international market. The former is making the product appeal to the consumers, while the latter is making sure the products reach the target customer. These factors can only be achieved through marketing communication. Effective marketing communication helps foster brand identity and the buyer is able to categorise their needs and tastes. Pepsi Co. (UK) has developed vitamin water (V Water) since 2005 and the product has gained sizeable market penetration in its domestic market.
The current need is for the company to expand its international market. Egyptian market has presented a good opportunity that would help the company increase its global market share. No company has ventured into the Egyptian market with similar product. Arabic is both official and national language of the country. That means our products will have to be branded and labelled in Arabic.
Both online and physical placement of products will have to be used. On the distribution of products, intermediaries will be of paramount importance to the success of making products available to the consumers. Sales promotion will need to be one of the major means of communicating the products to the market.
Introduction
It is widely accepted that there are mainly two strategies that can be used to penetrate international market- standardization according to the local market and differentiating, and market fragmentation. According to Usunier, 1996 (cited in Hunt, 2002), cultural approaches to internationalization of the product need some relevant promotional mix decisions.
The first is to establish if the product can be made in line with consumer behaviour. That is the company must establish if there is convergence in tastes and a concomitant diminution in the difference in culture of different regions or countries. The second is whether the firm should view globalization as a move away from competition at local as well as regional level to widening the market opportunities in the international arena.
According to the above views, some critical issues emerge from the assessment of consumer tastes and behaviour. The first is how products differ in the terms of cultural perception from different regional markets. The second is whether the consumers have free access to the global market or whether there are strong intermediaries that control the supply of the products.
Marketing communication can be used to impact on a number of cognitive and behavioural changes that include areas such as repositioning brand, changing misunderstanding, effecting the changes in beliefs and attributing the priorities among other issues. Similarly, proper research helps managers acquire adequate knowledge for effective marketing communications. The desired communication can also help build brand of a product. Moreover, marketing communication is meant to affect the buyer demand and create brand identity within the goal of building brand image (Travis, 2007).
From effective marketing communication, the buyer is able to identify category needs, where they can categorise the products or services that they believe will impact on their motivational state. In this perspective, the buyer will be able to recognize and recall the brand within the set category to ensure there is sufficient reason to make purchase of the product or service.
Pepsi Co. (UK) has developed vitamin water (V Water) since 2005 and the product has gained sizeable market penetration in its domestic market. The company wants to enter the Egyptian market in the near future so as to increase its global market share. However, the two countries business environments are completely different and unique. It therefore follows that specific approach is needed if any success is to be realized. Furthermore, no company has ventured into the Egyptian market with similar product.
Pepsi Marketing Communication Issues
Language difference
While the UK’s official and primary language is English, the dominant language in Egypt is Arabic, which is also the official language. Additionally, the educated lot is able to speak and write English and French. Pepsi products are labelled and branded in English, including the description of mineral contents of the vitamin water. However, in the Egyptian market, it may not make much sense to insist on English as the language that will define brand name.
It therefore means that for any successful penetration of this new international market, we will have to adopt Arabic language in the labelling of the content in the bottled water to make it easy for the local consumers to read and interpret what they consume (Zawya 2010). Basically, the essence and strength of our communication approach is based on the belief that Pepsi’s vitamins are better substitute for those in regular food.
Product Placement Communication
The majority urban populations purchase their products from retailers and wholesalers in the UK. The retail stores are mainly used to distribute Vitamin water products so as to reach the intended customers at the right time. It is through marketing communication that the Pepsi Vitamin Water can reach the intended market by developing a proper channel of communicating the existing product in the new market. This is due to the fact that product placement is in itself a marketing communication.
For example, placing a product in the internet for advertisement is communicating the product to the internet users, hence marketing. Egyptian tourism sector is one of the most vibrant sectors in the country and constitutes one of the major income earners for the country (CIA, 2010).
Majority of these tourists are from countries that have traditionally gained consciousness in health matters and are English speaking nations. It is therefore required that communicating the vitamin water to the tourist will need their understanding of the vitamin water as a result of the sedentary lifestyle they have adopted back in their native countries.
We need to use online placement of products and adopt home delivery of our products. This is important, particularly in reaching large institutional consumers such as hotels, schools, governmental and non-governmental organizations, etc. This is because there has been steady increase in internet use in the past years that can warranty the desired success. Basically, internet would be useful in marketing process as many people increasingly get attracted to the social sites giving companies opportunities to communicate with the target customers with ease.
It is noted that Egyptian market presents a huge business potential for Vitamin Water. However, this may only be possible when all the marketing communication aspects are taken care of in the entry process. But Egyptian market is still under heavy state control. That is, the public sector still has a big control of a huge chunk of the economy, and regulating much of the products, particularly food and beverage industry.
The government recognizes and gives favouritism to foreign firms that collaborate with local firms in offering their products and services. This call for one important approach: collaboration and partnership with the local distributors to ensure adequate penetration in the market. This will form one of the biggest marketing communications to the successful marketing initiatives.
Sales Promotions as a Marketing Communication
The changes in the market environment have created a scenario where marketers have adopted the need to develop several approaches to communicate their products and services. It is further complicated by the increased fragmentation of the modern market, creating a situation where marketers are faced with tough decision making processes, especially on how to build and develop a strong business initiative through powerful communication to the target market segment.
In the UK, different consumer audiences have emerged where marketers have targeted different and varied markets such as male consumers, gay, lesbians, affluent communities, aged and young among many other segmented groups.
In Egypt, the market has not been segmented as much as that of UK. That is, religious and cultural background factors are playing bigger role in the buying habit of many consumers in the country (CIA, 2010). Many soft drink companies like Coca Cola have adopted several techniques for sales promotion. One of the most common techniques is the premium promotion of Buy-One-Get-One- Free.
The other strategy is that of collaborative approach to marketing communication involving celebrities and charitable organization. This marketing communication technique is very common in Egypt. It is common to encounter some charitable organizations that are interested in organizing events for community development promotions such as health and safe water promotions. In this case, our sales team should be on the look out to find collaborators for the purpose of marketing vitamin water.
Although it may be considered too early to speculate that this will happen, we have to put it into consideration to ensure that we link up with any charitable organization with such a plan to enhance Pepsi’s Vitamin water brand’s publicity. This is in line with common trend of charitable organization’s combining forces with celebrities for a specific course such as health development.
While UK’s population is mainly spread across the nation, Egyptian population is highly concentrated in urban areas and clustered agricultural points. Direct marketing would be a powerful marketing communication tool to provide an edge in an attempt to increase the accessibility of the target market.
This is because engaging the clustered group of people would be easier, given the population distribution pattern. This subsequently calls for more in homogenous approach to advertisement. Online marketing is one of the best ways of providing an easy and cheap way of accessing the market, especially through the use of social networking sites.
Conclusion & Recommendations
Egyptian market presents a favourable destination for Vitamin water products. It is important to develop a marketing communication strategy that would help the company penetrate the market. The following recommendations will be important in developing a better communication strategy in penetrating Egyptian market.
- It is critical to develop language interpretation mechanism that would help create understanding among the target customer. Basically, both English and Arabic language should be used to cater for all the demographic population, including the tourists;
- Due to increased use of internet in the country, online placement and home delivery of products will be necessary. This will work well, particularly in reaching large institutional consumers such as hotels, schools, governmental and non-governmental organizations;
- There will be need to adopt collaborative approach to marketing communication with an aim of increasing brand identity. This can be achieved through increased involvement with the celebrities and charitable organizations through organized events.
Reference
Central Intelligence Agency (CIA) (2010), The World Fact Book. Cairo. CIA.
Hunt, S. (2002), Foundations of Marketing Theory: Toward a general theory of marketing. London. M.E. Sharpe.
Joshi, M. (2005), International Marketing. New York. Oxford University Press.
Kotler, P. & Armstrong, G. (2001), Principles of Marketing. New York. Free Press. pp. 186-197.
Mooij, M. (2010), Global Marketing and Advertising: Understanding Cultural Paradoxes. London. Sage Publishers.
Travis, T. (2007), Doing Business Anywhere: The Essential Guide to Going Global. Hoboken: John Wiley & Sons.
Zawya, P. (2008), Egypt: Food, beverages and tobacco forecast. Economic Intelligence Unit.