MARKETING RESPONSE PAPER

 

 

 

 

MARKETING RESPONSE PAPER

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Importance of Conducting SWOTT Analysis

SWOTT analysis is a tool that organizations use to analyze their internal strengths and weaknesses as well as external threats and opportunities (Ayub, Razzaq, Aslam & Iftekhar, 2013).  These strengths, weaknesses, opportunities and threats lie within the organizations operating environment. From the definition, SWOTT analysis comprises the internal and external evaluation of an organization’s environment. The internal analysis elicits the factors within an organization’s internal setting that can make it gain a competitive advantage over other firms. External analysis, on the other hand, elicits the opportunities that the organization can utilize to gain a competitive advantage over other firms as well as the threats within the same environment that may prevent it from gaining a competitive advantage over other firms (Ayub, Razzaq, Aslam & Iftekhar, 2013).

Michael Porters 5 Forces

Porter’s Five Forces Framework is a 1979 framework developed by Michael Porter. Market analysts apply this framework to predict the profitability of new businesses/companies/organizations, especially when they are introducing new products in the market. New products rarely pick; hence, need comprehensive analysis to determine their position in the market upon release (Porter, 2008). Comprehending the power of competition in the market helps to push the product beyond the dormant position. These five forces are;

• The bargaining power of the suppliers-It is an assessment of how easy it is for the suppliers in the market to hike up prices.
• The bargaining power of the purchasers. This assessment elucidates the ease of the purchasers to lower the prices in the market.
• Competitive rivalry. This analysis focuses on the competitors’ strengths.
• The threat to the new entry. This analysis describes a company’s position in relation to the ease of other firms joining the industry.
• Power of a substitute product. Competition is likely to be high whenever buyers have a choice of buying alternative products.

The hotel industry is one of the most competitive businesses in the world today (Chen, 2013). A strategic marketing manager for a hotel who needs to establish edges over its competitors may apply the Porters 5 Framework. In the hotel industry, the bargaining power of the suppliers is not too much of a threat. This is because its suppliers are different from those of other industries. This industry’s bargaining power is high and highly likely to switch suppliers because of the rapidly developing hotelier technology (Cheng, 2013). It is easy to source for suppliers via internet channels, plus the internet is readily available. These suppliers are unlikely to forward integrate into hotel ventures. However, hotel firms can backwards integrate to possess real estate establishments. The bargaining power of suppliers in this industry is high. The advancement in technology over the past 20 years has overseen the buyers’ power in this industry transform significantly (Cheng, 2013).  The entry cost of firms in this industry is a barrier to entry (Cheng, 2013). Starting a real estate venture may require large sums of money which may not be raised by small businesses.  The threat of substitute products/services in this industry is also low. This industry provides recreational services as touring and luxurious accommodation. Alternatives to these services may not be as convenient when compared to the original services offered. Rivalry in this industry is fierce. The high bargaining power of the purchasers makes these firms competitive.

Problems Marketers Face

At times, marketing fails, not because the organization lacks resources to conduct proper marketing, but because the organization’s marketers fail to overcome the challenges of marketing (Hofacker & Belanche, 2016). Some of the challenges facing marketers today include;

• Inability to access customer data from multiple platforms.
• Inability to identify synchronizes clients’ information.
• Marketers find it hard to map customers’ journey.
• Marketers usually have fragmented customer information, and this limits their chances of identifying new customers.
• Maintaining a consistent customer experience is not easy for marketers.

Pricing Strategies

Price may be defined as the monetary value of a good or service. Pricing strategy, on the other hand, is criteria used to arrive at the price of a good or service. There are four major pricing strategies;

• Premium-Premium pricing strategy is used for a new product that has a seemingly competitive advantage over other products in the market. The pricing of such a product is usually higher compared to rival products. In addition, the pricing is usually placed at the beginning of a product’s life cycle, and not after it has gained market recognition.
• Penetration-It is a pricing strategy used by firms to achieve recognition in the industry. Mostly, it is the new firms that use this strategy.
• Competitive pricing-it is a pricing strategy where the prices of the rival firms influence a firm’s pricing. Oligopoly firms mainly use this strategy.
• Skimming-Price skimming is a strategy where businesses set high prices for commodities before other firms join the industry and dilute the prices. This strategy aims to maximize profits before the competition takes over.

Coca-cola, a product of The Coca Cola Company, is priced through the competitive pricing strategy. Despite the company being a market leader in the beverage industry, it still considers the prices of its rivals such as the Pepsi Company. The two firms are oligopolies; hence, will always influence each other in pricing.

Elements of a Strategic Plan

A strategic plan is a plan that shows how the organization plans to achieve its goals and objectives. It is arrived at through the strategic planning process (Below, Morrisey & Acomb, 2007). A strategic plan contains five elements;

• Mission statement-They show the reasons for the company’s existence, including its scope.
• Vision statement-It outline’s what the company does or plans to do to achieve its mission.
• Core values-They show what the organization stands for as far as the company’s culture is concerned.
• SWOT Analysis-They show the current position of the company in terms of achieving competitive advantage.
• Goals, objectives and action Plan-It comprehensively outlines the organization’s goals and objectives as well as the strategies and tactics that the organization plans to use to achieve its goals and objectives.

A strategic plan makes it clear on what a company does and plans to achieve in its time of operations. Having one enables it to conduct business in a straight forward way. Therefore, it is highly unlikely to find a business caught up in marketing problems when it has a clear marketing plan.

 

 

 

 

 

 

 

 

 

 

References

Ayub, A., Razzaq, A., Aslam, M. S., & Iftekhar, H. (2013). A conceptual framework on evaluating SWOT analysis as the mediator in strategic marketing planning through marketing intelligence. European Journal of Business and Social Sciences, 2(1), 91-98.

Below, P. J., Morrisey, G. L., & Acomb, B. L. (2007). The executive guide to strategic planning. San Francisco: Jossey-Bass.

Cheng, D. S. (2013). Analyze the hotel industry in porter five competitive forces. Journal of Global Business Management, 9(3), 52.

Hofacker, C. F., & Belanche, D. (2016). Eight social media challenges for marketing managers. Spanish Journal of Marketing-ESIC, 20(2), 73-80.

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.